Remodeling vs. Building New: How to Decide What’s Right for Your Twin Cities Home

If you’re a homeowner in the Twin Cities metro with a low mortgage interest rate, you're in an enviable position—especially as rates climb. But what happens when your current home no longer meets your needs? Whether you’re running out of space, dreaming of a modern kitchen, or just want to upgrade your home’s style, you’re probably asking yourself the same question: Should I remodel or build a new home?

In this post, we’ll explore the pros and cons of both options, what you should consider when making your decision, and the key financial and lifestyle factors at play.

1. Keep Your Low Interest Rate—But Does Remodeling Make Sense?

For many homeowners in 2024, the idea of giving up a low mortgage rate is a significant factor when deciding whether to move or remodel. Current rates are higher than they’ve been in years, so if you sell your home and take on a new mortgage, you could see your monthly payments increase substantially. That’s a strong argument for staying put.

But is remodeling worth the investment? It depends on a few factors:

• Cost of Remodeling vs. New Construction: Remodeling can be more affordable, especially if you’re only doing one or two rooms or adding an extension. A new custom home, on the other hand, involves the cost of land, design, and construction.

• Return on Investment (ROI): A well-planned remodel can significantly increase your home’s value, especially if you focus on high-ROI projects like kitchen or bathroom renovations, or energy-efficient upgrades.

2. Remodeling: More Space, Modern Style, and Increased Home Value

Remodeling offers the opportunity to breathe new life into your current home, increasing space, functionality, and modernizing design. Here are some popular remodeling projects that might be right for you:

• Home Additions: Whether you need more bedrooms, a bigger kitchen, or a family room, an addition can provide the extra space you need while keeping you in your current home. Second-story additions are particularly popular in the Twin Cities, where lot sizes may limit outward expansion.

• Open Floor Plans: Many older homes have small, compartmentalized rooms. An open floor plan remodel can create a more spacious, modern feel by removing walls and integrating living, dining, and kitchen spaces.

• Energy-Efficient Upgrades: From new windows and insulation to solar panels, energy-efficient upgrades not only make your home more comfortable but can also lower utility costs and increase resale value.

3. Building New: Design Your Dream Home from the Ground Up

While remodeling allows you to work within your existing structure, custom home building gives you the freedom to design exactly what you want, without the constraints of your current layout. Here’s what you’ll need to consider:

• Total Control: Building a custom home lets you design every detail to suit your lifestyle, from smart home technology to energy-efficient systems. Want a dedicated home office, a luxury kitchen, or a multi-car garage? It’s all possible.

• Longer Timeframe: While building a new home gives you ultimate control, the process takes time. You’ll need to find land, work with architects, and deal with construction delays, which can make the process take up to 18 months.

• Higher Costs: Custom homes come with higher upfront costs than most remodels. You’ll also need to consider land costs, new mortgages, and building permits.

4. What About Resale Value?

Whether you remodel or build, you’ll want to think about the long-term resale value of your investment. In the Twin Cities housing market, strategic remodels can offer an impressive return on investment—especially projects like kitchen and bathroom renovations or home additions. On the other hand, custom-built homes often retain value well, especially if they incorporate high-end materials and energy-efficient features.

5. Final Considerations: How to Make the Right Decision

When deciding whether to remodel or build new, here are a few final questions to ask yourself:

• How attached are you to your current neighborhood? If you love your location and community, a remodel may be the better choice.

• What is your budget? Remodeling can often be more cost-effective, but building a new home gives you complete control over design.

• How much disruption can you handle? Remodeling projects can be disruptive, especially if you need to stay in your home during the work. Building new means living elsewhere during construction, but it offers a fresh start.

Conclusion: Remodeling or Building—What’s Right for You?

At North River Builders, we specialize in helping Twin Cities homeowners decide what’s best for their needs, whether it’s a custom home or a transformative remodel. Our team of experts will guide you through the process, from budgeting to design and execution, ensuring that your home is perfect for your lifestyle.

Ready to explore your options? Contact us today to schedule a consultation and start planning your dream home—whether it’s a remodel or a new build!