Staying in Your Current Home vs. Buying a New Home: Which Option Makes Sense in Omaha?

As the housing market fluctuates, many homeowners are left wondering whether it’s better to stay put in their current home or take the plunge and buy something new. In Omaha, where interest rates play a significant role in the decision-making process, this question is more important than ever. With many homeowners in Omaha sitting on mortgage rates of 3% or lower, the prospect of jumping into a new home with a 6.5% interest rate is causing many to pause and reconsider their options. If you’re currently weighing the pros and cons of remodeling your existing home versus buying a new one, here are some key factors to consider.

The Interest Rate Dilemma: Staying Put May Be the Smarter Move

One of the most significant factors influencing the decision to stay in your current home is the mortgage interest rate. Many homeowners in Omaha, and across the U.S., locked in historically low interest rates in recent years, with rates below 3% for a 30-year fixed mortgage. If you’re in that group, you might be sitting on a golden opportunity. Here’s why:

Lower Monthly Payments: At a 3% interest rate, your monthly mortgage payments are likely much lower than they would be at a 6.5% rate. Even if you were to buy a similar home today, you’d be paying more in interest over the life of the loan, which means higher monthly payments.

Equity Growth: If you’ve owned your home for several years, chances are you’ve built up substantial equity. Refinancing to take advantage of that equity could allow you to fund home improvements without the need to move to a new property.

Less Financial Stress: With a low mortgage rate, your overall financial picture is more stable. Selling and buying a new home would involve additional costs—such as closing costs, moving expenses, and potentially paying more in property taxes—on top of the higher mortgage rate. That can feel like a substantial financial burden in an already uncertain economic climate.

Remodeling Your Home: A Smart and Cost-Effective Alternative

If you’re happy with your home’s location and basic structure, remodeling may be a smart way to get the space and features you want without giving up your great mortgage rate. Here are some reasons why remodeling could be the right decision for many homeowners in Omaha:

Customized Improvements: Remodeling allows you to tailor your home to meet your specific needs. Whether you’re creating a home office, expanding your kitchen, or updating a bathroom, remodeling can make your current home feel like new. Omaha homeowners are particularly keen on investing in home offices and multi-functional spaces—something that’s especially important for those working from home

Increasing Property Value: A well-planned remodel can increase the value of your home. If you’re thinking about selling eventually, investing in projects that add curb appeal, improve functionality, or modernize outdated rooms can lead to a higher resale value.

Avoiding Market Uncertainty: The housing market in Omaha, like many other areas, can be unpredictable. While you may find a great home for sale now, there’s no guarantee that will be the case in the future. By staying in your current home and remodeling, you retain control over your living situation, avoiding the stress of navigating the competitive real estate market.

No Interest Rate Shock: One of the most compelling reasons to remodel rather than buy is that you avoid the interest rate increase. Remodeling can often be more affordable than moving, especially if you stay in your home with a low-interest mortgage.

When Should You Consider Buying a New Home?

Of course, staying in your current home isn’t always the best option for everyone. There are situations where buying a new home could make more sense:

• Growing Family Needs: If you’ve outgrown your current space and need additional bedrooms, a larger backyard, or a more desirable neighborhood, buying a new home might be the best choice. While the higher interest rates might sting, the long-term investment of a larger home could be worth it if it suits your needs.

• Lifestyle Changes: Perhaps you’re empty nesters looking to downsize, or you want a home that’s closer to work, schools, or family. If your current home no longer meets your lifestyle needs, it may be time to make the move.

• Ready for a Fresh Start: Sometimes, the desire for a new home is more about a fresh start than a need for more space or a change in location. If you’re yearning for a different type of property—whether that’s a modern new build, a different neighborhood, or a different style of home—a new home purchase might be what you’re looking for.

The Bottom Line: What Makes Sense for You?

For many Omaha homeowners, staying in your current home and investing in remodeling may be the more financially prudent choice, especially if you have a low interest rate. Remodeling allows you to enhance your current space and enjoy the benefits of homeownership without the higher costs associated with buying a new home.

However, if your family has outgrown your home or you’re looking for a change of scenery, buying a new home could still be a good option. It’s important to weigh the long-term financial implications of a higher interest rate and assess how well your current home meets your needs. The decision ultimately depends on your personal circumstances, goals, and the local housing market.

If you’re unsure of the best route to take, consider speaking with a local contractor about your remodeling options or a real estate agent who can provide insights into the current market in Omaha.

Whatever you decide, it’s important to ensure that you’re making a decision that aligns with your financial goals and lifestyle needs.