Buyers of newly built homes can save an average of $25,335 over the first 10 years of ownership compared to those who purchase 20-year-old homes, according to a data analysis by Realtor.com.
The savings are primarily from the lower utility costs from newer energy-efficient construction and the delayed replacement of major systems like HVAC, roofs, and water heaters. The savings are more pronounced in New England, with stricter building codes and harsher winters amplifying the efficiencies of newer homes. However, the less demanding codes and milder weather of the South doesn’t produce the same level of savings, even though the region has the most active new construction market.
“Homeownership is not a one-time expense, and the ongoing costs of owning a home are where new construction really shines,” said Joel Berner, senior economist at Realtor.com. “Buyers who focus only on the listing price are missing a significant part of the financial picture.”
Realtor.com also found the 10-year savings from buying new construction can fully cover the price premium over existing homes in 16 of the 300 largest metropolitan areas. These markets are concentrated in the South and West, where new construction premiums are modest enough to fall within reach of long-run savings.
“These savings estimates are actually conservative,” said Berner. “Builder warranties frequently cover HVAC repairs in the early years, meaning new construction buyers often pay nothing out of pocket. And when you factor in the mortgage rate buydowns builders have been offering, which can translate to roughly $30,000 in savings over ten years, the total financial advantage of buying new becomes even more substantial.”
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