The idea of young homeowners buying starter homes before moving on to their forever homes a few years later is no longer the norm. With the rise in Gen Z and millennial homeownership, how long people plan to stay in their first homes is changing. According to a recent article from CNBC, around 40% of people between the ages of 25 and 44 who bought homes last year plan to stay in them for at least 16 years.
As a result, these younger generations of homeowners are focusing more on remodeling their first homes for the long haul. Below, we’ll explore more about why Gen Z and millennial homeowners benefit from focusing on renovations now. If you have questions for us about your own exterior remodeling project, please don’t hesitate to call us at 317-884-3140 or contact us online.
Understanding Millennial Homeownership: Why Starter Homes Are a Thing of the Past
First, let’s quickly examine why the idea of a starter home is out of reach for Gen Z and millennials. Starter homes used to be thought of as smaller, lower-cost homes perfect for young people early in their careers.
However, in the current housing market, prices have skyrocketed for what is typically thought of as an entry-level home. The average home price in the US is currently around $416,100, which is up from $329,000 back in 2020.
Another reason younger generations are staying put is that most of them bought their homes when they were able to lock in a low mortgage rate. With rates now on the rise, homeowners are opting not to sell, instead investing in their current homes by renovating them.
Inflation and the Cost of Exterior Renovations
With inflation on the rise, many assume that now is not a good time to focus on exterior renovations, but the opposite is actually true. For many Gen Z and millennial homeowners, they are reallocating their “moving funds” to make improvements to their existing homes because of the following reasons:
- Renovating is cheaper than relocating when you factor in the cost of closing fees, high housing prices and interest rates, appraisal costs, movers, etc.
- Exterior renovations can increase property value, making them a solid investment
- Making energy-efficient exterior updates can help homeowners save on the cost of utilities
Simply put, even with higher inflation right now, you can save money in the long run by remodeling your home now instead of later. This is especially true if you plan to stay in your home for 16 years or more like most Gen Z and millennial homeowners do.
There Is Value in Enjoying Your Renovated Home
Another reason Gen Z and millennial homeowners are opting to renovate now is because they get to enjoy the benefits immediately. For example, instead of waiting to replace your windows until right before you plan to sell your home, doing it now means you can reap the benefits for yourself.
New windows, specifically, can improve your home’s energy efficiency, helping to reduce strain on your heating and cooling system. This can lead to lower electricity bills.
Instead of making that change in anticipation of selling your home, you can replace your windows now and enjoy the energy savings immediately, which helps to offset the cost of the project.
Investing in Your Home Even During a Turbulent Economy
With many economists predicting an impending recession, many people are cautious about spending money unnecessarily. However, history shows that periods of recessions or even near recessions are a good time to plan exterior renovations.
That’s because there is generally less competition when it comes to finding contractors and materials and because renovating your home is an investment that can improve your home value.
The key is to choose the right exterior renovation projects during a turbulent economy. The highest-value exterior remodeling projects tend to be the ones that will improve your home’s efficiency, like window replacements, as we mentioned above.
Other high-value exterior remodeling projects include:
By scheduling these projects now, you can feel confident in your improved value once the economy and housing market start to recover.
Let UHQ Construction Help You Invest in Your Home
If you’re navigating millennial homeownership and you want to invest in your home now, there’s no better time to do it. Our installers here at UHQ Construction can help you get the best value from your exterior renovations so you can get maximum enjoyment out of your first home, no matter how long you decide to live in it. To learn more, please call 317-884-3140 or contact us online.