by Maurie Backman | Updated July 19, 2021 - First published on July 14, 2021
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Though you'll pay a premium for a newly built home, you'll enjoy a lot of perks that come with it.
Given the lack of inventory in today's housing market, many prospective buyers are turning to new construction homes. But they're also paying a premium for them. Because the cost of lumber and other building materials has risen substantially, the average new construction home now costs about $36,000 more than it normally would. That means you'll likely have to take out a bigger mortgage to buy one.
But despite that higher cost, there are plenty of benefits that come with buying new construction. Here's why going that route could end up being a wise choice for you.
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Though there's no guarantee that things won't break within a newly built home, for the most part, buying a brand-new property means not facing any major repair issues for at least your first several years in that home. For one thing, new construction homes generally come with a builders warranty that covers workmanship defects for at least a year. And you may be able to negotiate a warranty that gives you even longer coverage.
Additionally, when you buy new construction, the appliances you get are new as well. And those generally come with individual warranties that last well beyond a year. Your home's water heater, for example, might include a five-year warranty, while your roof's warranty may last much longer. Not having to pay for major repairs could not only save you money, but also make it easier to adjust to being a homeowner.
Home values have the potential to rise over time, and by purchasing new construction, you may increase your chances of commanding top dollar when you go to sell your home. Many buyers don't want to take the risk of buying a fixer-upper that needs work, and some may not even be willing to buy a home that's not completely up to date. If you purchase a brand-new home, it's apt to be more modern and updated than the typical home in your neighborhood, which could work to your advantage at resale.
Newly built homes come with newer appliances, and that could result in a fair amount of energy savings. The result? Lower heating and cooling costs for you. Plus, having new appliances might save you time. A more efficient washing machine, for example, might make it easier for you to do laundry, and while that may not save you any money, it's a good thing for your sanity.
New construction isn't for everyone. Some people like the charm of an older home with classic features, and it could be the case that the newly built properties in your area are too modern for your taste. There's also the added upfront cost to consider when you purchase new construction, especially in today's market. But still, it pays to consider the benefits of buying a home that's never been lived in. You may find that what you spend on new construction, you save in other ways, all while enjoying the quality of life an updated house affords you.
Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase.
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