Why Consumers Can Afford To Build a New Home
Recently the National Association of Home Builders (NAHB) released a statement regarding a study they did comparing homes built before 1960 with homes built after 2008 showing home buyers why they can afford a higher priced home —particularly one that is newly constructed from stock house plans.
Putting together data from the Census Bureau and the 2011 American Housing Survey from the Department of Housing and Urban Development the NAHB found that buyers can afford to purchase or build a new home and achieve the same (sometimes lower) annual operating costs as an older existing home.
“Home buyers need to look beyond the initial sales price when considering whether to buy new construction or an existing home,” says Rick Judson, NAHB chairman and a homebuilder from Charlotte, NC. “They will find that with the higher costs of operating an older home, they can often afford to spend more to buy a new home and still have annual operating costs that fit their budget.”
Utility, maintenance, property tax and insurance costs vary depending on the age of the structure. Most homes built before 1960 have an average maintenance cost of $564 a year while a home built after 2008 averages $241. After taking into account the maintenance cost, they looked at operating costs. Operating costs for pre-1960 homes average nearly five percent of the home’s value while post 2008 homes average less than three percent.
After looking at maintenance and operating costs, the study compared the first year of owning a home by the year the house was built. They took into account the purchase price, mortgage payments, annual operating costs and income tax savings. When all of these variables were accounted for the data showed that homebuyers could afford to pay 23 percent more for a new house than one built before 1960 and still maintain the same amount of the first year annual costs.
Taking all this to account it is also important to note that mortgage payments will be greater with the higher purchase price of a newly-built home. However, the lower operating costs means that the home buyer will have annual costs that are the same as if they’d bought a lesser-priced, older home with a smaller mortgage payment and higher operating expenses.
Not only is the cost the same but benefits of newer homes also include open space floor plans, creative storage options and entertainment resources that cater to modern lifestyles. You will also have the peace of mind that the home you are buying is safe and meets modern codes and standards.
For a family working with a fixed annual budget, new-construction homes offer outstanding comfort, convenience and overall cost savings,” said Judson. “Put that together with today’s near-record low interest rates and competitive prices, and the time has never been better to buy a new home.”
So taking some advice from the NAHB and thinking about what you want in a home, perhaps it would be worthwhile to entertain building your own home to meet your needs. Take a look through The House Designers best-selling house plans and be on the way to the home of your dreams. The cost estimator can even help you figure out how much your new home with cost to build.
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