In either case, such actions could leave them underinsured and/or unable to finance repairs. This increases borrower default risk for mortgage servicers, and affects the value of their collateral.

This year, 71% of over 1,000 homeowners who participated in a survey from insurance brokerage Guardian Service said they were postponing renovations or repairs due to economic uncertainty.

By generation, millennials had the highest share, 74%, who said they would put off essential repairs, followed by baby boomers and Gen Z, both at 71%, and Gen X at 67%.

Why are Gen Zers impacted most by rising home costs

But the Gen Zers are likely the most susceptible in this situation, given the affordability challenges they already had to overcome to purchase a property in the first place. This is why several have turned to house hacking for example.

Mortgage borrowers are supposed to have reserves, money set aside to cover emergencies, whether job loss or damaged properties. Yet some have argued those should even be higher than current guidelines.

The average U.S. homeowner has delayed a needed repair by 8.4 months. Approximately 15% said they are putting off major upgrades indefinitely, with one-third willing to wait at least one-to-two years.

Home improvement budgets were 42% lower this year. Higher mortgage rates and property taxes, the hidden costs of homeownership, were making maintenance more difficult for 40% of respondents.

But Gen Z in particular was impacted, as 59% stated those higher costs affected their ability to care for their properties.

Knowledge gap is affecting homeowners

The survey also found that nearly 23% of respondents did not file an insurance claim because they were worried the condition of their home could trigger an inspection or result in a coverage denial. For Gen Z, this ratio rose to one-third, Guardian Service said.

"A surprising 20% of homeowners were unaware that putting off repairs could negatively affect their property's value or insurability," the report said. "For some, the consequences are already hitting home — 13% said they've had trouble renewing their homeowners' insurance, while 11% were charged higher premiums because of damage or outdated features."

Just under half of those surveyed said they were not aware that upgrades to their home could lower their premiums; for the Gen Z cohort only, this was 55%.

Almost 70% of all respondents said lower inflation would make them feel financially ready to make repairs or renovations. Meanwhile, a lower cost of building materials was cited by 65%, while reduced tariffs on imported building materials was the response of 43%.

Lower mortgage rates are not as much of a motivator, cited by only 27% of the respondents.