Pandemic dynamics, rising mortgage rates, a burgeoning work-from-home movement and low unemployment rates may have exacerbated an existing phenomenon — nationwide, Americans are barely moving. The 2022 “move rate” was 8.7 percent, not statistically different from the low 8.4 percent rate in 2021, according to the U.S. Census Bureau. The number of movers also remained statistically unchanged between 2021 and 2022 (about 27.1 million and 28.2 million, respectively.) Instead, what many of them are doing is fixing up what they’ve got.
The 2023 Hippo Housepower Report, a national survey of over 2,245 U.S. homeowners, noted that current financial and economic conditions may be encouraging Americans to stay put but has not stopped them from tackling maintenance and repairs projects to protect, beautify and improve their properties. Do-it-yourself (DIY) tasks have become the most popular way to stay ahead of managing responsibilities as home budgets remain tight in 2024, according to the survey.
“People generally are not borrowing,” said Rocco Carriero, a wealth manager in Southampton. “Many have excess cash after rebalancing their portfolios and often invest that money into their homes. Having a low-rate mortgage or a mortgage-free home can be a good incentive to stay and make what you have more comfortable.”
Mortgage rates have more than doubled since the start of 2022. The typical monthly mortgage payment for a single-family home now takes up half of a purchaser's monthly disposable income, up from about 30 percent prepandemic, according to Pantheon Macroeconomics. Meanwhile, nearly one-fourth of existing mortgages have a rate under 3 percent. That’s contributing to many homeowners feeling “locked in” to their current home, reluctant to move and take on a much higher mortgage rate.
“There are three main buyer types in the Hamptons,” said real estate veteran Joan Tutt of Seashell Real Estate in Southampton. “There’s the second-home buyer, the local year-rounder and the investor. The stock market recently hit a new high. How might that affect the local market?”
Compared to 2022, homeowners are not interested in selling their current property (14 vs. 26 percent) or buying a second property (13 vs. 26 percent). Instead, homeowner priorities have shifted to home upgrades (39 percent), home security and safety (32 percent), home monitoring and other services to help prevent problems (23 percent). This could be a result of homeowners’ biggest concerns in the past 12 months being rising inflation rates and the impact of climate change and/or extreme weather events on their home.
With the median age of homes over 41 years old, according to the U.S. Census Bureau, homeowners are prioritizing projects like repairs and regular maintenance to update their homes and extend the time they will live there while also helping to avoid costly future repairs.
“It’s a different clientele here,” said Michael Semb, a manager at the kitchen and bath department at Water Mill Building Supply. “Our customers are generally not repairing or replacing things themselves. They typically select what they want and turn it over to a contractor. They may not have the time or skill to do it themselves, but they’re still upgrading, making their homes more comfortable. This can be more efficient.”
Investments in maintenance and updates avoid costs and headaches that may come later.
“This past year’s low housing inventory and high interest rates have homeowners being cautious about the costs of homeownership, leading them to prioritize budgets and find new ways to prevent small problems from becoming big issues,” said Rick McCathron, the president of Hippo. “Nearly one-third of homeowners who participated in our survey said they would advise peers to prioritize scheduling and budgeting for regular, proactive home maintenance and emergencies in 2024.”
To help manage homeownership expenses and responsibilities, many typically reduce discretionary spending and make energy-efficient upgrades while generally taking a more active role in their property’s year-around protection as home insurance premiums and protecting one’s home from damage have become priority items, Hippo’s report found. Common energy-efficiency upgrades include installing new doors and windows, switching to efficient lighting, using recycled, repurposed or reclaimed materials and using eco-friendly paint.
According to the Environmental Protection Agency, volatile organic compounds (VOCs) are human-made chemicals that are used and produced in the manufacturing of things like paints, pharmaceuticals and refrigerants. These compounds are emitted into the air as gases and contain harmful chemicals and carcinogens that can cause both short-term and long-term health issues to humans and the environment. Today, VOCs are largely found in older or cheaper products as consumers choose paints that do not contain such compounds.
Speaking of paint, the color of the year is English Green. Valued for evoking feelings of growth and renewal, it is a calming, soothing tone that is a nature-inspired shade
“We know millennial homeowners can use some extra help when it comes to tackling basic home repairs, especially since more basic projects can help them save money versus hiring a professional for the project," said Jen Wilson, Lowe’s senior vice president in a statement.
“Labor and material are still in short supply for many items,” Tutt said.
Similarly, new government mandates are forcing people to make sustainability upgrades. In New York State, toilets must flush at 1.28 gallons per flush and new showerheads are now at a 1.75-gallon-per-minute flow rate to conserve water.
According to the Hippo report, in the past 12 months, 46 percent of responding homeowners said they had something unexpected go wrong in their home. The most common home issues homeowners faced were appliance break-downs (31 percent), water damage (23 percent) and roof damage (20 percent). The most common home systems to break down were: HVAC units (24 percent) plumbing (21 percent) and water heater and refrigerators (both 18 percent).
Despite the challenges, there is an inherent joy in homeownership. Homeowners report “a sense of pride” when completing home maintenance and repair tasks and learning skills that make their dwelling more safe, secure and comfortable while providing a stable living environment for their family to create lasting memories and pass something to future generations. But things likely will not remain this way indefinitely as many are predicting one to two interest rate cuts in 2024.
“People have been staying put,” says Dawn Watson of Serhant Realty in Westhampton Beach. “They’re waiting for rates to come down in the face of thin inventory. When they do drop there will be a mad dash of buyers.”
