Stepping into the timeless charm of an older home is often a dream come true for many. With interest rates higher now than in decades past and home prices staying stubbornly high, is buying and renovating an older home a better option than purchasing a home that is "move in ready?"
The Upkeep Costs of Older Homes
Interior Costs
The upkeep costs for owning an older home are typically higher than owning a new home. New owners of older homes face higher upkeep costs than homeowners who have lived there for over a decade. According to the U.S. Census Bureau, between 2019 and 2021, 61% of older homeowners initiated improvement projects, spending an average of $4,100.
The average cost of home improvement projects of older homeowners for a 2,000-square-foot home:
Plumbing fixture replacements: $3,100 to $5,500
Flooring replacements: $8,000-$30,000
Water heaters: $2,200
Exterior Costs
The most significant and common exterior replacement or renovation costs are doors, windows, and a roof. The average cost of home improvement projects for older homeowners for a 2,000-square-foot home:
Exterior door replacements: Doors average $200 to $800. Labor costs average $230 to $1,300.
Window replacements: Window prices average $300 per window but vary greatly. The average cost of labor is around $40 an hour.
Roof replacement: Roof prices vary, but the average is around $10,000.
It’s not beyond the average to expect to pay $50,000-$100,000 in immediate renovation costs when purchasing an older home.
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Borrowing Costs
The median home cost varies from neighborhood to neighborhood and state to state. The national average (median) in July of 2023 is just over $400,000. Bankrate shares the average cost per state.
Related reading: something about borrowing and credit scores
According to the Federal Reserve, when writing this (October 13, 2023), the average 30-year fixed rate mortgage is 7.57%. Assuming 20% down on a $400,000 home ($80,000), that is a $320,000 mortgage. The total cost is calculated and illustrated below, which includes the average cost of property taxes and insurance.
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What Next?
As we have written about, renting can sometimes make more financial sense than buying a home. Right now, that might be the case. These past resource rich posts will help you decide:
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