Are buyers of new homes wiser than buyers of existing homes? It all depends on your perspective.
While new home sales are strong, their numbers do not approach the number of resale homes. According to the National Association of Homebuilders, In November 2016, 313,000 new construction homes were sold. More than six times as many existing homes were sold in the same period. The number of existing home closed in November 2016 was 1,950,000.
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More people prefer a new home
In 2014, Trulia reported, “For the same price, 2 in 5 of Americans (41%) strongly or somewhat prefer to buy a newly built home over an existing home.” Of those preferring a new construction home, 55% prefer them because they expect to spend less on maintenance and repairs. And that is borne out by statistics. According to the U.S. Census, the median expenditure for maintenance and repair is $8/month new homes compared with $33/month for all homes.
Trulia notes, new home prices are typically 20% more expensive than existing homes. However, the price differential can be wiped out if the buyer of an existing home has to make substantial or even modest upgrades or repairs. So, a new home’s greatest value not only its modern floorplan, current materials and energy efficiency. The new home’s advantage is that everything is at the beginning of its useful life expectancy.
Table - Review the normal life expectancy of major appliances and systems:
Typical expenses for major home repair and replacement
HomeAdvisor reports that the average expense to replace a roof is $6,600. Replacing an HVAC system will run you about $5,300. The cost of the average bathroom remodeling project is $9,300.
Angie’s List provides this infographic to help you comprehend replacement costs of most home appliances. Click here to see Angie's List infographic.
It’s easy to see that the cost of repairs or replacements of systems and appliances to an existing home can easily exceed the 20% difference in purchase price.
Buy a new home with confidence
You can purchase your new home with confidence that all your systems and appliances are new and covered by a warranty. As is your home. Most builders provide a 10-year structural warranty. Read our articles about home warranties.
In our opinion, a new construction home gives you peace of mind and assurance that your home’s systems will perform better than a resale home due to the advantages of having new components as well as being exactly the home of your dreams.
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