Building New vs. Buying an Existing Home

One of the first decisions buyers make is whether to shop for an existing home or build a new one. Most homebuyers spend time and energy searching for or designing “the perfect home” before signing contracts or laying down funds.

Location, price, market trends, property taxes, and homeowners association fees are factored into a house hunt. Whether buying a new home or an existing property, each path has advantages and disadvantages.

Buying an Existing Home

There are two primary advantages to buying an existing home: convenience and cost. Once buyers are pre-approved by a lender, they can shop around, pick out a home, and make an offer.

A qualified real estate agent streamlines the process by finding appropriate properties, guiding buyers through negotiations, and assisting with paperwork. Once an offer is accepted, buyers may be able to close quickly, on average between 30-45 days, and move into a home.

Schedules and Cost

Buyers on a tight schedule, such as those relocating for a new job or whose children will be starting at a new school may find buying an existing home attractive. It can also be cheaper to buy an existing home, according to the National Association of Home Builders. In the United States, buyers save about $6,000 when purchasing an existing home. In 2023, the average total building costs were $421,000, while the median single-family list price was $415,000.

Convenience vs. Customization 

Existing homes commonly have mature landscaping with lawns, shrubs, and trees. The floor plan is already visible upon inspection, and buyers can see the layout.

However, older homes may be functionally obsolete and require renovations or expansion. Potential buyers must factor these expenses into the overall price, especially when choosing among various properties or comparing the cost of building a new home.

Building a New Home

Building a new home offers buyers an opportunity to design the space for their family. While the building doesn’t offer the timely conveniences of buying an existing house, buyers can usually choose every element of the new structure. 

Design Choices

Building a new home means buyers can get what they want. They can create a more efficient home that meets energy codes and standards for heating, ventilation, cooling, insulation, and air filtration.

A custom building timeline can range from six to eighteen months, depending on the builder, architect, and land. Joining an existing development may streamline the process, though it may limit a buyer’s degree of choice.

Everything Is New

Buyers avoid costly renovations or repairs with a new home build. A new house also incorporates updated environmental standards. New homes commonly come equipped with energy-efficient appliances and HVAC systems. Older homes may contain asbestos, lead paint, or mold that require remediation.

Even though the upfront costs of building can be higher, it may be easier to recoup the investment. A newer home is typically more appealing than an older home at resale and new homes typically include a warranty. A builder warranty commonly includes limited coverage on workmanship and materials for windows, heating, ventilation, air conditioning, plumbing, and electrical systems. 

The Bottom Line

Location and price are considered when buying a home, but buyers must also decide whether to buy a new or existing home. An existing home usually provides a quick move-in date, though buyers must consider the cost of updates or renovations. New homes allow buyers to decide on interior and exterior designs but often come at a higher price and longer timelines.