Younger Americans More Likely to Use Money for Down Payment Over Renovations

Two-thirds of homeowners would prefer to renovate their current home rather than make a down payment on a new one, according to a new report from Zillow.

Overall, it seems that homeowners are happy with their current homes, with 83 percent saying that they love their home and the majority saying they don’t have plans to sell their home at this time.

Older or retired homeowners were more likely to want to renovate their home, as 87 percent of respondents over the age of 55 and 91 percent of retirees said they’d rather renovate than put that money toward a new down payment.

However, renters and younger Americans (those between 18 and 34) were the most likely to say they would use the money as a down payment.

The preference to renovate rather than buy a new home could be adding to the strain of low inventory across the country. Zillow reports that the number of homes for sale has fallen for 43 straight months, although there has been some slowdown in this area. Additionally, rising mortgage rates may have an impact on this since those who have a low mortgage rate now may not want to lose by buying another home at a higher rate.

“Even in a seller’s market, simultaneously buying and selling is an exercise in frustration. Add to that the emotional history between you and your home, and it’s no wonder low inventory has been in a self-fulfilling cycle,” said Skylar Olsen, Zillow’s director of economic research and outreach. “Homeowners may hesitate to sell because of limited options for them as buyers, but by holding on to their homes, they are themselves contributing to low inventory.”