2 min read- New data finds that buyers of new homes often spend more upfront but find massive savings over a decade of ownership.
- The average savings is approximately $25,000, but potential varies by region, with New England seeing the highest rates.
- Builder incentives play a large role in fostering savings, as insurance on major home systems, mortgage rate markdowns, and price deductions all incentivize potential buyers.
Shopping for a new home can be stressful, to put it mildly. From browsing neighborhoods and analyzing floor plans to the age-old battle of pre-owned versus new, every step can feel overwhelming, even for seasoned buyers. While it might seem the most cost-effective to buy an existing home up front, you might want to reconsider before submitting your down payment. New data from Realtor.com suggests that buying an older home will actually cost you more in the long run.
Newer constructions tend to carry a heftier price tag, but existing homes can come with costly, sometimes hidden baggage. Dated materials, patched damage, and that “lived in” feel can help hide and nurture costly problems that you’ll have to tackle down the line. A dripping faucet can be an indication of bad pipes, drafty windows can drive up utility bills, and that weird patch of paint on the ceiling? That could be hiding water damage. While you may pay less upfront, those odd jobs add up, ultimately costing much more in maintenance than if you opted to buy new.
Realtor.com’s data found that there are savings to be had in every state. That’s right, coast to coast, it pays to buy new, though you won’t see the benefits up front. It can take time to uncover issues, and for repair jobs to deteriorate, so to remain comprehensive, the study focused on savings over ten years. Other factors, like climate and regional conditions (think drought and natural disaster risks like wildfires and earthquakes), leave a margin of error to be considered, but overall, you could be missing out on anywhere from $17,000 to $39,000 in savings by buying older. The state with the highest yield for new construction buyers is Massachusetts, but all of New England boasts potential savings of over $30,000, while states on the lower East Coast see the lowest, with South Carolina clocking in at only $16,000.
So what’s boosting states over the $25,000 savings estimate? Builder incentives. Freshly built homes are already carrying lower sale tags in around fifty of the nation’s largest metropolitan areas, and with builder-offered mortgage rate markdowns, price reductions, all-cash deals, and insurance on major systems like HVAC and plumbing, the potential to gain even greater savings is ripe. So sure, you can’t fake that old home charm—but saving a good chunk of change is hardly something to shake a fist at, either.
