Is It a Good Time to Buy a Fixer-Upper?

There are some potential pitfalls to buying a fixer-upper right now.

If you are looking into purchasing a home right now, you may be attracted to fixer-upper properties. A fixer-upper, or a home in need of some upgrading or remodeling, may seem like a good choice in today's economy when mortgage rates have been rising and home prices have hit recent record highs. 

But is a fixer-upper really a good option right now? Here's what you need to know to help you make an informed choice. 

There could be added challenges with fixing up a home right now

Whenever you buy a home in need of upgrading or remodeling, you need to take the cost and complexity of the renovation projects into account. And right now, fixing up a home could be both more difficult and more expensive than it normally is.

See, there have been ongoing supply chain issues plaguing the construction industry in recent months. These supply chain issues have caused all kinds of havoc, from a paint shortage at the start of the year to lumber prices that first skyrocketed and then plummeted.  

The uncertainty about whether materials will be available when you need them -- and about what price you will have to pay to get them -- could make it harder to estimate remodeling costs or to determine a timeline for when your project will be completed. 

There have also been labor shortages throughout the year as well. This could affect your ability to find tradespeople to help you with any projects you might need to hire as you work on fixing up your home. 

So should you move forward with a fixer-upper?

If you aren't comfortable with the stress of not knowing when a remodeling project will need to be completed, or if you are on a tight timeline, then buying a home that needs to be fixed up may not be right for you at the moment. 

Likewise, if you'll need to hire out for the entire project, you may want to talk with local builders first to find out the potential timeline for getting your home upgrades on the list. It's better to have this conversation before you buy a fixer-upper and find out that you can't find a builder to help you make it livable. 

But if you are OK with the uncertainty in terms of cost of materials and labor, and if you can be more flexible about when your home renovations are finished, then a fixer-upper shouldn't necessarily be off the table. With the rising cost of houses throughout much of the United States, being able to pay less for a home and increase its value through sweat equity could be especially attractive.

The important thing is to consider not just the pros and cons of buying a home that needs renovation, but also the way the unique economic conditions in the U.S. right now could affect your ability to move forward. By taking all of this information into account, you should hopefully be able to make the best and most informed choice about whether to buy a house that's updated and ready to move into or one that needs a lot of work.