When choosing between an existing home and a newly constructed home, it’s important to look past the sales price to the actual monthly cost of owning your home. Newly constructed homes are likely to bring lower energy bills and require less maintenance, which could reduce your monthly out-of-pocket expenditures. And if you’re paying more in interest each month, you may have an added tax benefit too. Use the calculator above to compare the true costs of owning an existing vs a newly constructed home.
Higher price: The modern layouts and conveniences of a new house don’t come cheap. You’ll likely pay a higher price than you would if you chose an older house. However, you may find that the price per square foot is less for a new home.
Potential HOA fees: Newer neighborhoods tend to have amenities like pools and gyms. That means you may end up paying homeowners association (HOA) fees to maintain them. But having HOA fees can make it easier to maintain the value of your home.
Typically, less charm: Builders want to increase their profit margin, and one way they do this is by offering a limited number of floor plans. New construction neighborhoods tend to look very similar, and you won’t experience the charm you see in older homes.
May have a longer commute to work and schools: Again, since builders are looking to save money, they often choose to buy land outside of the city. This could result in a longer commute to work and school.
Limited or no negotiating room: Timing is everything when it comes to buying a home, and if you approach a builder at the end of their fiscal year, you may be able to negotiate on price. But for the most part, there’s little room for negotiation when it comes to selling new construction. You may be able to request certain upgrades, but the price is unlikely to change.
Extensive landscaping: New construction homes may require extensive landscaping, which can take a lot of time and money to complete.