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New Construction vs Existing Home: What’s the Right Move?
Is It Better to Buy a New Construction or an Existing Home?
Is it better to buy new construction or existing homes in today's market? Dallas home buyers are likely considering the choice between new build homes and resales; it’s possible you may also consider a fixer upper. What are the benefits and downsides to each, though? The housing market in Dallas, Fort Worth and surrounding areas continues to grow and options are plentiful.
According to the U.S. Census Bureau, there has been a 1.8% increase in new construction home sales over the past 12 months. The National Association of Realtors has shared that there has been a 3.1% increase in resale home purchases. While it’s still more common for buyers to purchase resale homes, buying newly built homes has grown in popularity among Dallas-Fort Worth buyers for a range of reasons.
Here is what you need to know about the options and price ranges available for each type of home.
Major Differences Between Existing Homes and New Homes
Building your dream house is a major decision, but it can be an exciting one. There are so many myths surrounding building a new home and purchasing an existing property. We’re here to debunk a select few.
Are New Homes More Expensive Than Existing Properties?
Cost is obviously a monumental factor to consider when weighing options between building a home and buying a home. Historically, new home builds were widely considered much more expensive. However, it’s important to note that cost can be relative to various factors like:
● Personalization or custom options for a new build
● Energy efficiency
● Maintenance costs
Customizing a New Home Build
Most experienced Texas home builders should have a solid process to help homeowners discover and decide on the basic layout with various home design options. Homeowners don’t have to reinvent the wheel on deciding square footage or arrangement of kitchen. Your home builder should have examples and even house models where you can tour and experience your new home before the build is even underway.
It’s important to consider the cost options of other upgrades when going through the new home build process. A reputable home builder can help you weigh various options and provide more clarity on what certain upgrades will cost. This can mean keeping expenses to a minimum and ensuring that your new Dallas - Fort Worth home build doesn’t exceed your overall budget.
With John Houston Homes, you’re provided access to our exclusive Design Studio & Gallery. We can help walk you through the elements of your new homes while remaining cost effective and transparent about budgets. Select from elements like: paint colors, flooring, countertops, fireplace elements, exterior stone, stair railing and so much.
With an existing home purchase, you won’t have the freedom of personalizing your home as easily. While renovations can help you reinvent the layout and design of the house, overall, it may result in higher costs and even prevent it from being move-in ready.
Downside of Buying an Existing Home
The reality of a resale home likely means maintenance needs and possibly upgrades. This may depend on the year the home was built and condition it’s in when it hits the market. Unless you like to take on DIY projects, this might involve hiring professional contractors to help you get your home in good condition.
On the other hand, a newly constructed home has modern materials that haven’t suffered wear and tear damage. This gives the home more strength and durability. As a result, it may be many years until your new home needs repairs or updates.
Elements of a New Home vs Existing Home
The appearance of the home can be a factor as well. If you prefer traditional charm, a resale home could be the better option. When you’re looking for a modern architectural style and technological conveniences, you’ll feel more satisfied with a new construction. These are just a few of the more noticeable differences you should consider as you compare these options.
So is it better to buy new construction or existing homes? A deeper comparison can help you make up your mind.
Choosing Between Existing Homes and New Homes
As you ask yourself, “Should I buy new construction?” It might help to take a closer look at the differences between each option.
Pricing of Existing Homes vs. New Homes
People who compare new build vs. existing home purchases often focus on the upfront sales prices for each. Currently, a 1,600- to 1,700-square-foot new construction sells for an average of $325,000 in Texas.
Resale homes of similar size sell for $300,000. When you're considering the cost of repairs and maintenance for a resale home, however, the buyer might pay more for a home that’s just 20 or 30 years older.
Timelines to Consider
The closing process on a resale home typically takes 30 days. That timeframe is similar for newly built homes. However, if you want to customize the home during the construction, your wait could be 6 to 10 months longer.
Are New Homes the Way to Go?
Overall, is it better to buy new construction or existing home properties? Whether you choose a newly built home will depend on which issues are important to you. If you’re looking for modern conveniences, little maintenance, and a customized living space, a new construction may be the best choice in the Dallas market.
FAQs About Buying New Homes
Do New Homes Appreciate Faster Than Old Homes?
The equity and value you build up in your home will be important considerations for every buyer. Many people wonder, “Do new homes appreciate faster than old homes?” When comparing new home appreciation rates from 2017 to 2022, you can see that values rose by 7.5% annually.
In that same period, resale home values rose by 9.3% per year. While appreciation for resale homes has typically been higher, a growing interest in new construction homes is generally expected to raise appreciation values in the future.
Are New Homes Built Better Than Older Homes?
If you’re looking for strength, durability, and efficiency, modern homes offer more value for the buyer. Additionally, it’s easier to add new technology to a home during the construction process than it is to install the same equipment in a pre-existing home.
Is It More Efficient to Build a New House or to Live in an Older House?
A resale home is going to have issues with energy efficiency. Wear and tear leads to drafts throughout the home, and an older HVAC system might not have the ability to keep up with heating and cooling demands.
On the other hand, a new home with energy-efficient appliances will use less energy overall. The structure of the new home can do more to retain treated air and prevent drafts.
Is It Easier to Get a Loan for a New Home or an Existing Home?
Your ability to get a loan for either type of home purchase will depend on your credit score, debt-to-credit ratio, and your income. If you customize and build a home, you’ll need a construction loan to cover the costs associated with the building process.
Once the construction is complete, you’ll need to convert the construction loan to a traditional mortgage. This process involves additional fees that will raise your costs.
What’s the Downside to Buying an Existing Home?
There are many downsides to buying a pre-existing resale home. Although the upfront costs may be lower, you’ll likely have to make repairs throughout the home. Your maintenance costs will depend on how well the previous owner cared for the property.
Unlike a new construction, you might also need to make costly renovations if an existing home doesn’t immediately meet your family’s needs. Since the home is older and weaker, the long-term maintenance costs are usually higher for an older resale home.
Discover the Joy of a Newly Built Home Today
Schedule an appointment to visit a community or speak with a new home advisor at John Houston Homes.
Available home and base prices are subject to change without notice. Base prices to build are starting prices for the lowest elevation offered per plan and vary by community. Plans, square footage, and options are subject to change without notice. Interior and Exterior Design selections may vary or change without notice. See Sales Manager for details.