Is Now the Time to Build, Buy, or Renovate?

Was 2025 the year you planned on buying or building a new home? Maybe you had big ideas for a renovation in your existing home.

With the pandemic posing challenges on multiple fronts, you might need to adapt your goals. Then again, you can still find ways to carry out your plans to build, buy, or renovate.

Building a Home in 2026

Homes built in the United States keep getting bigger. In 2010, nearly 60% of new single-family homes were smaller than 2,400 square feet. In 2020, the average square footage of a new single-family home has grown to more than 2,500 square feet. Homes also have more bedrooms–rising from an average of 3-4 to 4-5 bedrooms per household.

However, with more people telecommuting, location matters less than it used to be when considering building a new home. What the area has to offer is now more important than the length of the commute.

Because of this, new home builders have more freedom to retreat to newly developing suburban areas or even rural locations.

Benefits of Building

Building a new home gives you the freedom to lay everything out exactly the way you like it. Also, when you build your own home, you’re able to create a plan for the future. Your family planning goals can help you estimate the number of bedrooms needed.

Additionally, you can include a home office in the design process instead of trying to find an empty corner for your desk.

Drawbacks to Building

Building a new home can get expensive. Mills closed this spring due to COVID-19, and 20% tariffs on Canadian imports caused the cost of framing lumber to reach record-breaking levels. The demand for lumber is far outstripping supply, driving the cost of building projects up.

Bottom Line

If you can absorb the higher cost of materials, you’ll benefit from lower labor costs, due to the unemployment rate that’s higher than any we’ve seen since the Great Depression.

Building your home the way you want it can mean minimal renovations in the future. If you’re planning on your new build being your forever home, start now.

Buying a Home in 2026

If you opt to buy a home, you have two options: a newer home or an older home. Each one has specific advantages and disadvantages that can make or break your decision.

• Newer Homes

If you buy a newer home, you may be able to transfer a home warranty. A warranty could cut down on unexpected costs due to any problems experienced during the construction process. This makes it easier to fix a plumbing or electrical issue that’s related to errors during the build.

Nearly 60% of new single-family homes are in a subdivision with a homeowner’s association (HOA). Depending on how much control you want to exchange for neighborhood amenities, you may view the HOA as a pro or a con. One in five American families lives in a subdivision controlled by an HOA.

• Older Homes

If you buy an older home, you’re more likely to get additional square footage for your money, inside and out. You’ll often find old houses on larger lots compared to new homes built on smaller lots. A larger lot can come with a need for landscaping services. It also means more distance from your neighbors and room for amenities, like a garden or a pool.

You’re also more likely to have mature tree growth. Strong, healthy trees can offer shade and privacy as long as they don’t stand too close to the house or electrical wires. You should also make sure they don’t have root systems that interfere with underground lines or pipes.

Benefits of Buying

If you want to move within the next year, buying a home will let you achieve your dream faster. You’ll have more choice regarding the location, and you can take advantage of an established neighborhood that’s complete with amenities; building a new home often means buying in a still-developing area.

Drawbacks to Buying

If you had your heart set on a solarium and can’t find a home on the market that features one, you might have to compromise.

Buying an existing home means buying someone else’s vision, whether a former homeowner or a builder. You have a slim chance of finding a home that matches your ideal space.

Bottom Line

Buying a home is the road most traveled because it’s much easier to get a traditional home mortgage than to finance a new build. New home construction hovers at less than 1.2 million for 2020, while home sales in 2019 were five times that number.

If you don’t know whether to buy, build, or renovate, consider that buying a home offers a low hassle option compared to building and renovating.

Renovating a Home in 2026

Maybe you’ve already found your dream house, and it just needs a little tender loving care (TLC). Perhaps you intend to trade up but have decided to wait. You can renovate your home to fit your current and future needs, increase resale value and appeal, or both.

Renovating a home for yourself means you have different priorities than if you’re renovating for resale. You can customize your dream home to deliver everything you want, as well as what you need. A house that’s going on the market means focusing your investment rather than your taste.

Renovating a Home You Plan to Keep

Look around and think about what you like most and least about your home. The aspects you love most can serve as an inspiration when you renovate less attractive areas.

Many homeowners take on these renovation projects when they plan to keep their home:

• Redoing the Kitchen

A complete kitchen makeover can get rid of outdated appliances and worn cabinets, giving you a more modern space for cooking and gathering.

If you’re on a tight budget, consider covering old linoleum floors with wood laminate, buying new but mismatched energy-saving appliances, and refacing cabinets instead of ripping them out. Raising low counters or adding a kitchen island can also transform your space.

• Adding a Bathroom

Have you ever wondered why many older homes have only one bathroom, even if they have three or four bedrooms?

Before and after World War II, materials such as copper, iron, cast iron, and steel were in short supply, and government restrictions meant builders had to construct homes with minimal plumbing requirements. If you live in an older home, adding an extra bathroom could create a new level of convenience for your family.

• Creating a Home Office

Whether you’ve always telecommuted or the pandemic has relegated you to the work from home, working at your kitchen table offers little privacy and organization.

A dedicated home office can significantly boost your productivity, and you can even get a tax break for identifying a part of your home as a business space. Consider electrical outlets, lighting, and soundproofing when building your ultimate home office.

• Renovating a Home for Resale

For a home that you plan to put on the market soon, you don’t want to spend more than you can recoup. If you repaint, go with neutral colors, and only refloor with hardwood if you refloor at all. Choose a minor kitchen renovation instead of a major overhaul, and you’ll get back more of your money.

Consider working on your home’s curb appeal, especially if you live in an area with cookie-cutter housing or you have an older home. A fresh coat of paint, some attractive shrubs, or a few flower boxes can work wonders.

You can do plenty of small home renovations that’ll add value and bring in a better offer when you’re ready to sell your house.

Benefits of Renovation

Overall, a renovation can serve a dual purpose. You can enjoy it while you live there, and it can add resale value when you decide to sell. You can also determine what’ll make your home more comfortable or aesthetically pleasing, bringing your dreams to life.

Drawbacks to Renovation

The cost and time you spend renovating can add up fast, whether you DIY or hire a contractor. You may not be able to use the area you renovate while you’re working on it, and the noise and debris can disrupt your routine.

You may end up putting a lot of money into a renovation that doesn’t add any value to your home, so consider your options carefully before you start.

Bottom Line

You may not be able to begin construction this year due to job loss and shrinking savings. Likewise, you might have to put off buying as banks tighten loan restrictions. Renovation can bring you happiness in your current home, no matter your plans for the future.

Whether you buy, build, or renovate in 2020, your goal should be overall life improvement. If you have to postpone your plans, you can work on refining them, so you’ll be ready when the time comes to take the next step.

Chris Muller is a professional personal finance writer who has written for some of the largest financial publications in the world. Chris brings a BBA and MBA in Finance, along with a decade of experience in the field, to help break down complex financial topics into easily digestible pieces through his written content, in an effort to assist others in better managing their finances. Chris is currently in pursuit of FI/RE, is an aspiring minimalist, loves craft beer, and is dad two to kids.