About 1 in 5 Gen Zers, or 22%, say a lack of affordable starter homes poses as a barrier towards homeownership, according to a new report. Some believe fixer-upper homes might be the answer to the issue.
A fixer-upper is an existing house that needs varying degrees of maintenance work and is typically offered at a low purchase price, by Redfin’s definition.
More than half, 57%, of Gen Zers polled said they are willing to put an offer in on a fixer-upper, according to a new report by Clever Real Estate. The site surveyed 1,000 Generation Z adults 18 and older; 126 of the total were homeowners.
However, some of those who went that route are already rethinking their decisions. To that point, of the 40% of Gen Z homeowners who did buy a fixer-upper, about 27% regret it, the report found.
Given the survey’s small base of homeowners, it’s hard to say how fixer-upper regrets might play out on a larger scale. But experts say it’s not unusual for buyers of such properties to feel overwhelmed.
“A lot of them are first-time buyers; they don’t really know the true costs of homeownership and how these renovations and repairs can really be a lot,” said Jaime Dunaway-Seale, a data writer at Clever Real Estate.
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Buying a fixer-upper home can mean savings in the short term, but would-be buyers need to keep renovation costs in mind, as well as the home’s current functionality, said Marine Sargsyan, staff economist at Houzz, a home renovation and design site. For example, if your new home doesn’t have a usable bathroom that might delay your ability to move in.
“Functionality above everything. Anything you have in your house has to function,” she said. “If it doesn’t, then see how much it’s going to cost for you to replace [it].”
‘Young buyers are having to make trade-offs’
As homeownership affordability is out of reach for many Americans, a fixer-upper home could mean short-term savings.
The median cost of a fixer-upper house is about $283,000, according to a May report from StorageCafe, which analyzed data from its sister division, Point2. That is about 29% lower than a move-in ready home, saving buyers roughly $117, 000, StorageCafe found.
“Young buyers are having to make trade-offs because housing prices are so expensive,” said Susan Wachter, professor of real estate and professor of finance at The Wharton School of the University of Pennsylvania.
Some Gen Z buyers are even willing to buy fixer-uppers with significant disrepairs or outdated features that pose great risks. Over half, 56%, of Gen Zers in the Clever Real Estate survey said they would buy a home with asbestos, a mineral fiber that can increase the risk of developing lung diseases if exposed to it.
When shopping around for fixer-upper homes, make sure the house is safe and livable enough not to cause any health and…
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