If you’re thinking about entering the housing market for the first time, you probably wonder does it cost more to build a new home or buy an existing home? It’s a good question with many variables – location, amenities etc, and one best answered by your realtor or home builder. That said, we can make some generalizations based on median costs. These costs will vary from location to location.
Does it Cost More to Build a New Home or Buy an Existing Home?
The median price of a single family home in the United States is $252,000.00 and rising due to low inventories. Currently, it’s a seller’s market. If you do find a home for sale in a location you prefer be prepared to get into a bidding war with other interested buyers.
The average cost of building a new home, according to Homeadvisor.com is $286,277, that’s a differance of $34,277. Obviously, the cost of a new home can vary greatly depending on customization and amenities. $34k is a lot of money so it’s worth good consideration to buy a used home over new construction, but let’s see what you get for that additional $34k.
Location
When you purchase an existing home you don’t have much choice in location. If you like the home you will be living in that location. Of course you could move the house, but there goes your savings and then some (the cost to move a house even a few miles can be upwards of $200k! When you build a new home, you get to choose the location. If you want southern exposure you can have it. If you want to have a wooded backyard, you can do that too. You have many more options when building new.
Maintenance
Older homes, no matter how you slice it, will have more maintenance issues. Appliances wear out after time, the roof will need to be replaced. HVAC and other mechanicals become outdated and expensive to run if not updated. Additionally, many older homes do not have the needed infrastructure for today’s heavy tech world. Many older homes need to be rewired to meet the demands of all the gadgets and devices that need charging on a daily basis. New homes are designed with tech in mind and are forward facing with regard to applainces and how they are powered. You’ll find charging stations in the home and garage for today’s new tech. In an older home all of that will need to be retrofitted.
Energy Efficiency
Today’s new homes are much more eco friendly and energy efficient than homes built even a decade ago. Today’s building materials are more energy efficient and will save you money in the long run. The average newly built home uses 21% less energy than older homes. Your energy bills will be lower and if you choose to install solar panels, you might not even have an energy bill. That’s a huge savings and goes a long way to cut into that $34k extra it costs to build a new home.