More Homebuyers Are Searching for This Kind of Home—Is It the Solution to High Housing Costs?

In a housing market with high home prices and stubbornly high mortgage rates, some Americans are looking for any way possible to save money and start building home equity. Consider a “fixer-upper.”

In a new report last week, online real estate platform Realtor.com said that searches for the term have tripled since July 2021,. While those homes still spend longer on the market than a typical house around the same age and price, that gap is narrowing.

Homebuyers Are Eyeing Fixer Uppers

Realtor.com said that fixer-uppers typically sell for about half the price of the median single-family home in the U.S.. They are also typically smaller and older. As of July of this year, the median home identified as a fixer-upper listed for $200,000, compared to the national median listing price of $436,250 for all single-family homes.

In the last four years, Realtor.com found, homes specifically marketed as fixer-uppers are now receiving 52% more views per property than similarly aged and below-median-price homes, almost three times the page views per property in July 2021.

Despite that attention, fixer-uppers still spend longer on the market, a median of 53 days, compared to 50.5 days for other 20-plus year old homes priced below the median in their area. In July 2021, that gap was wider at 39 days for fixer-uppers compared to 33 days for homes that could be fixer-uppers but weren’t marketed as such.

Realtor.com found that markets like Syracuse and Albany in New York and other Northeastern metropolitan areas along with Midwestern cities like Toledo and Detroit tend to have the highest share of their available homes for sale taken up by fixer-uppers, with market shares ranging from about 9% to roughly 11%. St. Louis and Toledo are among the metro areas that have the biggest shares of fixer-uppers. Jackson, Mississippi and St. Louis, Missouri are the metro areas that offer the biggest fixer-upper discounts, the gap between the median fixer-upper listing price and the median price of a similar single-family home in the area.

What That Means For You as a Homebuyer or Seller

There are just north of 79,000 fixer-uppers available on the market as of July, according to Realtor.com, making up about 5.2% of the single-family homes currently for sale in the U.S., down from 6.1% of the market the same time four years ago.

So while fixer-uppers are slightly more rare than they were four years, you can likely still find a fixer-upper If you’re looking for one to move into or potentially flip.

Realtor listed terms people often use in listings to signal that a home is a fixer-upper, including “needs work,” “good bones,” and encouraging a buyer to “roll up your sleeves.”

If you’re looking to sell a fixer-upper, the Realtor.com report suggests that there may be a wave of interest as home buyers look for ways to make an expensive housing market more affordable. Sellers of an older home have the choice of putting in the renovation work (and expense) themselves, or selling a home as is in the hope of finding a buyer willing to renovate or customize it to their own taste. Marketing a home as a fixer-upper with a lower price rather than just as an older home can elicit more interest from buyers.

However, that’s not a guaranteed reaction from all home shoppers. Research from real estate competitor Zillow found that some buyers are prepared to pay up to $13,000 above their expected price to find a home that is ready to be moved into rather than one that needs work.

The Bottom Line

Search interest for fixer-upper homes has jumped in the last several years, and the gap between how long fixer-uppers and other similarly aged and priced homes stay on the market is shrinking. That suggests that a growing number of people are prepared to take on renovating and customizing a home so they can save money while mortgage rates and home prices remain elevated.