By Samantha Delouya, CNN
(CNN) — For years, buying a home in need of work was seen as a more affordable path to homeownership and building wealth. Home makeover shows dominated TV, house-flipping became a booming business, and first-time buyers embraced the idea of trading sweat equity for a lower purchase price.
But lately, fixer-uppers have been falling out of favor.
This year, they are selling at a 14% discount compared to similar move-in-ready homes – the steepest discount Zillow has recorded in years. That’s nearly double from last year, when fixer-uppers sold for 7.3% less than comparable move-in-ready properties.
Before the Covid-19 pandemic, by contrast, homes described as “fixers,” “needs work,” “TLC” or having “good bones” were more likely to sell than comparable listings, according to Zillow.
For many Americans, the math behind buying a fixer-upper no longer pencils out. Tariffs, inflation and a shortage of construction workers have made home improvement projects significantly more expensive — and often more time-consuming — over the past few years.
Dozens of first-time homebuyers who purchased aging homes in need of work expressed a common theme to CNN: High home prices and elevated mortgage rates had already stretched their budgets thin, leaving little money for the renovations needed to make their homes livable.
Juli St. George, a real estate agent in Atlanta, told CNN she has noticed a shift in her clients in recent years.
“The Chip and Joanna Gaines era has passed,” St. George said, referring to popular television personalities who rose to fame through the HGTV show “Fixer Upper.”
“Before, people were looking for grandma’s house where they get to make it their own and save up every quarter and make a new addition to their house,” she added. “It’s not happening anymore.”
(HGTV is owned by Warner Bros. Discovery, CNN’s parent company.)
When Molly and Matt Dodge bought their first home in Arlington, Vermont, this year, they knew it needed work. But they fell in love with the space, just over an acre, with enough bedrooms so that their two kids no longer needed to share.
Contractors quoted between $30,000 and $50,000 to replace their septic system, and thousands more to address the home’s growing list of problems, including: leaks, mold, ant infestations and carpenter bees. The couple has already spent about $10,000 on do-it-yourself repairs.
Months into their renovation process, Matt and Molly Dodge’s optimism has faded.
“We currently wish we built instead of bought,” Molly Dodge wrote to CNN last week in a moment of frustration.
Fixer-uppers are falling out of favor
For much of the 2010s, fixer-uppers offered a relatively straightforward path to building wealth: Buy a home at a discount, invest in renovations and watch rising home values offset the costs. But that calculation has changed.
Tariffs on building materials such as lumber and steel, along with the inflation surge that began in 2022, have driven up the cost of renovations. Meanwhile, a persistent shortage of construction workers has pushed labor costs even higher and slowed projects.
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