If you’ve ever bought a home, whether a new build or an existing home, there is no doubt that you’ve spent money on purchases to help make your house a home. According to recent research from the National Association of Homebuilders (NAHB), new home buyers outspend non-movers and buyers of existing homes. And buyers of new homes spend on very specific items.
When do new home buyers spend more money?
Did you know that new home buyers spend more for appliances, furnishings and home alterations in their first year? NAHB reports, “During the first two years after closing on the house, a typical buyer of a newly built single-family detached home tends to spend on average $4,500 more than a similar non-moving home owner.”
After the first year, their spending returns to normal levels. Interestingly, according to NAHB’s analysis of data, new home buyers do not seem to make adjustments on their other spending - such as eating out, buying cars, or food - in order to afford these purchases for their new home. From our perspective, this might indicate that home buyers have budgeted or saved for these items or they deem the items so essential that they purchase them anyway.
What do new home buyers spend money on?
- Clothes washers/dryers
- Lawnmowers & yard equipment
- Computer hardware & systems
- Furnishings, specifically, living room chairs, tables & sofas
- Exterior/landscape improvements including driveways, walks, fences
Home furnishings are big ticket items for new home buyers
Did you know that “during the first year after buying a home, new home buyers spend $3,778 on furnishings, outspending old home buyers’ 70 percent and non-moving owners 530 percent”?
Study data shows, “The biggest ticket item for new home buyers is sofas, with an average spending exceeding $700 during the first year after moving.” But new home buyers don’t stop there. “During the first year after moving, new home buyers spend $687 on living room chairs and tables, outspending non-moving owners and existing home buyers 12 and 5 times respectively.”
When it comes to furnishings for the home’s interior, “new home buyers outspend non-moving owners 10 times ($215 compared to $21)”.
New home buyers spend money outside the home
NAHB documents that “new home buyers spend $3,729 on average on property alterations and repairs, which is several hundred less than buyers of existing homes.”
New home buyers are the biggest spenders of all types of homeowners (new home buyers, existing home buyers and non-movers) when it comes to spending of this type.
Many new home builders sod and landscape a front yard; however, some may leave the backyards, driveways or enclosing of the yard to the buyer.
Money spent on landscape improvements is important to making a house into a comfortable place to live and entertain. It is easy to comprehend that if you have pets or kids, you want to keep them safe, so a fence is generally a requirement. Then you want your backyard to be an appealing outdoor space, so you may add a patio, or deck or even a fire pit.
Planning your expenditures
For any purchase … whether new or existing it would be wise to consult your builder sales representative or lender. Many people do not realize that a major purchase via credit made after being pre-qualified for one’s loan could in fact affect your lender’s loan calculations and possibly your ability to qualify for your loan. You may want to first concentrate on closing on your new home then make your first purchases once you are in your new home. Though the living room furniture you just found is a perfect fit for your new home it may prevent you from buying your dream home. Best advice consult your real estate professional or lender first.
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