How to navigate home buying and renovations in a fluctuating market
Your home is a haven for today — and an investment for tomorrow. Whether you’re considering how to buy a house or other property, or looking into a renovation, you’ll need a thoughtful approach — especially during a time of rising interest rates.
Envision your future housing
You may be thinking about downsizing to a smaller home or moving to a dream retirement location. As you plan, consider perks like proximity to loved ones, as well as costs like state taxes.
13 years
Average amount of time buyers aged 57 to 66 owned their home before sellingFootnote 1
17 years
Average amount of time buyers aged 67 to 75 owned their home before sellingFootnote 2
What’s next? Pave the way for a smooth loan approval process
Qualifying for a mortgage in retirement can be tricky since you may not have steady employment income. Advanced planning is key, as is maintaining a high credit score.
67% of Baby Boomers aged 67 to 75 financed their homes vs. 87% of all buyersFootnote 3
86% of all buyers viewed a home purchase as a good investmentFootnote 4
Remodeling? Create a realistic budget
A redesigned home can provide extra space for visiting kids and grandkids — and potentially bolster your resale value. The secret to success: sticking with the numbers you set.
25%
Increase in homeowner spending for improvements from 2020 to 2021.Footnote 5
Considering financing your renovation? Choose wisely
You may need to borrow if you don’t have enough money on hand. Keep rising interest rates in mind as you explore your options.
35% of homeowners used credit cards to help finance renovation projectsFootnote 6
14% used a secured home loanFootnote 7
Interested in a second home?
A second home can be a much-needed respite and a gathering place for multiple generations. In addition to the home’s price, factor in repairs, taxes, and insurance. Keep in mind that inflation and rising interest rates can make these bills bigger.
In early 2022, demand for second homes was up
87%
over pre-pandemic levels.Footnote 8
Would that second home be an investment property?
Real estate, such as a rental property, can bring in extra revenue. Yet managing this type of asset is much tougher than most think. Plan ahead for the time and extra money it will likely take.
Most lenders will require a credit score of at least 700 and a down payment of 15 – 25% for an investment property.Footnote 9
Understanding the key considerations for buying a second home.Learn more
Sources:
1. National Association of Realtors.
2. National Association of Realtors.
3. National Association of Realtors.
4. National Association of Realtors.
5. Angi.
6. Houzz.
7. Houzz.
8. Redfin.
9. Bankrate.