New Construction vs Existing Homes: The Pros and Cons of Both
In today’s hot housing market, buyers are likely to consider every available home for sale. And while each home has its unique charms, newly built homes and resale homes come with different upsides and downsides. As you weigh whether to choose new construction vs existing homes, here are some things to consider.
Benefits of new construction
Modern and customizable floor plans
If you opt for a custom-built home, you’ll work with the contractor to create a traditional or modern layout that works for your life. Hankering for a home office for remote work? They can build it. If you’re buying new construction that’s already been completed, chances are good the layout will lean to modern, with wide-open floor plans. Rooms in new construction homes — especially bedrooms and bathrooms — tend to be larger and brighter, with lots of natural light.
Even if you’re not getting a custom home, you may be able to upgrade finishes from builder-grade materials if you connect with the builder before construction is completed. It may cost you a bit more, but adding your own personal touches may be worth it to you.
New “smart” appliances and home systems are more energy efficient. And more efficient insulation and windows create buttoned up homes that are less expensive to heat and cool than older models. All of that translates into lower utility bills.
Smart and healthy
“Smart” technology options allow you to automate internet, cable, speakers and even an alarm system. And new homes often use low- and zero-VOC (volatile organic compound) paints and building materials, improving indoor air quality.
A newly built home typically requires less maintenance since everything from appliances to the HVAC system and roof are brand new. This means you can better predict monthly homeownership costs, since you’ll likely spend less to maintain your home.
Many newly built homes have warranties that can protect components of your new home for years before you need to undertake any major repairs.
New home communities
Buying new construction often means buying a lifestyle. Master or planned communities often include amenities like parks, pools and community spaces that are close to schools and transit. The key is finding a builder who offers what you care about.
Caters to buyers who value flexibility
The time needed to complete new construction can provide some breathing room if you don’t need to move quickly. You can put an offer on a house that hasn’t yet been built or is in the early stages of construction, and then move in when it’s ready. The timeline doesn’t work for every buyer, so you may have less competition if your moving timetable is flexible.
The flip side
Potentially higher costs
New construction is usually more expensive than a resale home. For instance, the median sales price of an existing home in the U.S. rose to nearly $391,200 in April 2022, while the median price of a brand new home topped $450,600 that same month — a difference of nearly $60,000.
Possibly longer commute
New construction of detached single-family homes tends to happen outside urban areas. Here, bare land is more plentiful, but commutes to jobs, grocery and hardware stores may be longer. Some suburban and rural areas may have fewer nearby options for dining, culture, arts and entertainment than urban areas. However, in urban areas, you may find new construction apartments, townhomes, and even a few single-family homes closer to culture hubs.
Lack of mature landscaping
New landscaping takes years to grow. Landscaping around a home in a new subdivision where earth has been cleared to make way for homes and yards can feel stark and exposed until plants and landscaping features bring life to the property.
More waiting and risk of delays
If you’re looking at new homes that have been completed, this isn’t a factor. But if you’re building a custom home or signing up for a home during the construction phase, it could take several months longer than moving into an existing home. The amount of time will vary by market and builder, so you’ll want to consider budgeting time for potential delays.
Read more: If you’re interested in new construction, read about the types of new homes, the steps to building a custom home, and tips for buying a brand new home.
Benefits of existing homes
It’s less likely that you’ll encounter surprises that push back the day you can move in once you close. Unless you’re buying a fixer or plan to do extensive remodeling prior to moving in, you’ll be able to move in when you get the keys.
One of the pleasures of an established neighborhood is the maturity of the trees and landscaping, not only along the streets and in the parks, but also in your neighbors’ yards.
Existing homes tend to be less expensive than new construction. A Zillow analysis shows that the median sales price of an existing US home in fall of 2021 was $354,000 versus $400,000 for a brand new home. Given material shortages and inflation, those differences are likely to persist into the near future.
More location choices
Most new detached single family homes are built outside urban areas. Buying an existing home typically gives you far more options when it comes to where to live.
Building a custom home involves a lot of decision-making. This includes everything from the floor plan to interior and exterior finishes and materials. An existing home allows you to focus on the areas that need sprucing up or that you want to customize to reflect your personal style and preferences.
Architectural details and history
Older homes are more likely to have architectural details that would be hard and expensive to replicate. They also sometimes have great stories behind them that you become part of when you move in.
The flip side
Outdated floor plans
Unless a home has been extensively remodeled, you’re unlikely to find modern floor plans. In older homes, the kitchens and bedrooms, even the front rooms, were built for a different era that may not jibe with the kind of space you’re looking for.
Outdated technology and fixtures
Old homes can be extremely outdated when it comes to technology, some even having knob and tube wiring dating from the first half of the 20th century. While it’s possible to upgrade wiring and install smart technology to replace old thermostats and lighting, it’s more costly to undo something and then redo it than to install it when the home is being built.
Older homes can be poorly insulated and rely on polluting resources such as oil for heat.
Potential for more repairs and maintenance
Unexpected repairs to older appliances, roofing and heating systems can have you spending money where you didn’t expect to.
Read more: You can learn more about how to find your dream home and research different types of houses while considering the pros and cons of existing homes.