In a survey from the Department of Housing and Urban Development American Housing Survey (HUD), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
In December 2014, the average cost of a new home was $298,100 while the cost of an existing home was $209,500. Saving that kind of money on a home purchase allows a homeowner to budget in a remodeling project.
This leaves remodeling as the viable option
Remodeling costs can be eased by taking it on a do-it-yourself (DIY) basis. According to the 2013 American Housing Survey, a homeowner can save more than half of the cost of a project with DIY. A professional bathroom remodel runs $8,221 versus a DIY at $3,000. The kitchen, one of the most costly remodeling projects, comes in at $15,000 for DIY and $35,821 for a professional.
Buying an existing home can put a first-time homeowner in a better financial position. Instead of renting until they save up money for that new home, they can begin gaining equity in their house and enjoy the benefits of having their own residence. Encourage homeowners to remodel to get the home they want at the price that works for their budget.