The Weird Secret Behind New Homes Being More Affordable Than Old Ones—and Where to Find Them!
You might think that a brand-new home with sparkling countertops and flawless floors would come with a higher price tag compared to an existing property. Surprise! That isn't typically true these days.
The combination of higher mortgage rates and limited housing inventory has created incredible opportunities where a new house can actually be cheaper than an old home. In fact, a 2023 study by StorageCafe even found that new construction costs less than comparable preexisting homes in 18 states!
This new reality opens up a unique opportunity for you, whether you've always dreamed of owning a new home or you're tired of competing for existing properties. Many homebuyers who have never considered new construction are now exploring this option and finding themselves pleasantly surprised by the relatively modest price tags and fewer hassles that come with purchasing a new home.
Here are some tips to help you snag a brand-new house for less money and fewer headaches:
1. Make your offer at the right time: Timing is crucial when buying new construction on a budget. The best deals are often available early or late in the process. Developers often offer lower prices for early sales to secure the financing they need to complete the project while buying late can lead to substantial savings as builders near the completion of a project.
2. Home in on a spec home: Builders frequently construct "spec" or "inventory" homes to showcase to potential buyers and expedite the closing process. These homes are typically ready for immediate purchase, but customization options may be limited. However, the potential savings make spec homes a worthwhile consideration, and you can always renovate later to suit your preferences.
3. Be willing to compromise on lot or house size: In a new development, each lot can have a different price, even if the same model home is being built. By considering lots in less desirable locations or a smaller home, you might be able to secure a better deal.
4. Say no to upgrades, yes to incentives: Builder upgrades, although tempting, can significantly increase the price of a new home. Consider sticking with the base finishes and saving for future upgrades through a contractor or DIY projects to save money upfront. Alternatively, ask about builder incentives such as "free" upgrades that can instantly boost your home's value.
5. Shop in the right area: Areas with limited housing inventory, particularly in suburban or rural regions farther from city centers, offer excellent opportunities for new construction at better prices. Raw and developed land tends to be less expensive outside population centers, and these savings are often passed on to buyers. Consider being flexible with your preferred location to prioritize affordability.
6. Don't overlook energy savings: Regardless of the upfront cost, new-construction homes come equipped with features such as energy-efficient windows, appliances, and HVAC systems. These features contribute to long-term savings through lower utility bills. When considering costs, don't forget to factor in the reduced monthly expenses associated with a newly built home.
Ready to make a move with confidence? Get pre-qualified --with zero obligation --and begin your journey towards buying a brand new home!