For years, buying a home in need of work was seen as a more affordable path to homeownership and building wealth. However, with the rising costs of renovations and interest rates, fixer-uppers are falling out of favor. According to Zillow, fixer-uppers are selling at a 14% discount compared to similar move-in-ready homes, the steepest discount in years.

Rising Renovation Costs

Tariffs, inflation, and a shortage of construction workers have made home improvement projects significantly more expensive. Many Americans are finding that the math behind buying a fixer-upper no longer pencils out. High home prices and elevated mortgage rates have already stretched their budgets thin, leaving little money for renovations.

First-time homebuyers, such as Molly and Matt Dodge, are feeling the pinch. They bought their first home in Arlington, Vermont, knowing it needed work, but the cost of repairs has been overwhelming. Contractors quoted between $30,000 and $50,000 to replace their septic system, and thousands more to address other issues.

A Shift in the Market

The shift away from fixer-uppers is also reflected in earnings reports from home improvement retailers. Home Depot and Lowe’s have reported that homeowners are putting off larger home improvement projects. The average US home is 42 years old, and millions of Americans are living in homes that need significant repairs.

A bipartisan housing affordability law aims to tackle the increased cost of addressing repairs by creating new incentives for homeowners. However, for many, the dream of a fully renovated home may have to wait.

Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.