Home renovators have traditionally thrived by transforming distressed properties and putting them back on the market. Yet, recent data from Zillow reveals a significant shift as home shoppers now prefer remodeled homes instead of fixer-uppers. Buyers are willing to spend nearly 4% more than projected on homes already remodeled, which translates to about $13,194 on the average U.S. home. This increase is the most significant price bump observed across 359 listing keywords analyzed by Zillow from two million properties.
Buyers, it seems, are not simply browsing; they are ready to commit to their next purchase. This shift is quite stark when compared to trends from just last year—to say nothing of the years preceding the pandemic. Last year, homes labeled as “remodeled” garnered barely any sale-price boost, adding less than 1%. Prior to the pandemic, homes designated as “fixer,” “TLC,” or “needs work” often sold faster than their more polished counterparts.
So what accounts for this evolution? The answer appears to be financial pressure. “Fixer-uppers can be appealing to a first-time buyer trying to get their foot in the door of homeownership because they offer a lower initial price of entry,” explains Amanda Pendleton, Zillow’s home trends expert. “But buyers, who are already stretching their budget to afford a home in today’s market, may not be willing or able to spend more on renovations or repairs.” She added, “A remodeled home may come with a higher price tag, but buyers can spread those costs over the course of 30 years on their mortgage rather than paying cash upfront for renovations.”
Indeed, fixing up a home can be quite the arduous process, and many are now opting to evade the complications tied to major renovations. Zillow’s research has revealed sobering news for the fixer-upper market: homes requiring significant updates are selling for 7.3% less than expected, with those needing “TLC” or “work” marked down about 8%—a loss potentially exceeding $28,000 on average.
This year's market reflects broader economic shifts. The digital age saw the golden age for fixer-uppers, primarily fueled by millennial homebuyers seeking good deals and the popularity of renovation shows glamorizing DIY efforts. Yet, as the economy matured post-Great Recession and home prices rebounded, buyers previously felt confident facing budget adjustments during renovations due to anticipated rapid home appreciation.
Fast forward to 2024, and home appreciation has cooled significantly to 2.6%, with projections hovering around 2.9% for 2025. The ease with which sellers could invest in renovations anticipating returns has largely dwindled. Now, nearly 30% of all listings on Zillow promote “renovated” as their key selling point, following last year’s surge of move-in-ready homes on the market.
The modern reality for would-be buyers? They aren’t interested in projects—they want completed, ready-to-live-in homes, and they are prepared to pay up for them.
On another front, the outlook for homebuilders has dimmed. Data from the National Association of Home Builders indicates contractor expectations for sales volumes have hit their lowest point in over a year. This downturn stems primarily from uncertainties surrounding tariffs and their possible impact on material costs. Homebuilders depend on imported materials such as lumber, metals, and appliances, which are at risk of becoming more expensive.
According to Nancy Vanden Houten, lead economist at Oxford Economics, “If their costs go up, then prices probably being higher than they would otherwise.” Such rising input costs could dissuade new construction—an important factor considering the tight housing market already faced by potential buyers.
The hope for increased affordability hinges on whether builders can bolster supply, something made increasingly challenging by labor availability issues. With immigration policies from the Trump administration potentially limiting the pool of workers, Charlie Dougherty, senior economist at Wells Fargo, pointed out, “A lack of new supply would only make those hurdles higher,” likely maintaining current affordability hurdles for prospective homeowners.
The hurdles confronted by buyers reflect the broader condition of the housing market, which is poised for continued imbalance. Through multiple pressures and setbacks affecting both the demand for new housing and the willingness to invest in older homes, the overall forecast suggests only tempered opportunities for buyers and builders alike.
Across the board, the once-common fantasies surrounding fixer-uppers are fading fast. Today's buyers prefer properties they can move directly onto without the need for extensive and disruptive renovations.