Report: New Homes More Affordable in the Long Run, Despite Overall High PricesBy Claudia Larsen
In the ever-going search for affordability in the market, new research identifies that while prices may be higher on newly built homes, they cost less in the long run for homebuyers than existing homes.
Realtor.com®’s new report on the total cost of homeownership found that homebuyers purchasing newly built homes can save $25,335 on average over their first 10 years of ownership (compared to homebuyers purchasing existing homes 20 years or older) due to lower energy bills and fewer major repairs. Realtor.com Senior Economist Joel Berner said that owning a home is not a “one-time expense,” and in those ongoing costs is where “new construction really shines.” As existing-home sales stall, data this month showed new builds picking up steam, with that category of properties benefitting from mortgage buy downs amid high rates and ongoing affordability issues. Realtor.com noted that its report is sourced from data from Pearl and its Pearl SCORE®, which rates single-family homes by safety, comfort, operations, resilience and energy. The report noted that these savings for new homebuyers can vary depending on region due to local building codes and climate discrepancies. The Northeast observes the most savings, with the top five highest saving states all specifically in New England: Massachusetts with $38,927 in savings, New Hampshire with $35,885, Maine with $34,763, Rhode Island with $34,641 and Vermont with $33,998. Newly built homes can come at a “premium”—a higher price—compared to existing homes, but the report noted that there are 16 metro areas (out of the 300 largest) where this premium is covered by the savings seen in the first 10 years of ownership. These metros reside mainly in the West and South, where premiums are smaller than other regions:
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