So, you’re tossing around the idea of building your own home versus buying one that’s already on the market—because let’s face it, the market is pretty grim. But in 2024, with the economy in the pits and more just short of half the American population renting rather than owning, is it still worth it to build a home?  

Spoiler alert: the answer is yes. But the reason why might not be what you’re expecting. 

The Case for Building New 

First things first, there are a ton of perks when it comes to building a new home. To start, new construction means you get exactly what you want without having to shop around for it. That open floorplan kitchen you want doesn’t have to involve knocking out a few walls and you don’t have to DIY crown molding onto your doorways.  

Imagine walking through the front door of a home that was designed just for you, where every nook and cranny reflects your personal taste. From the layout to the finishes, everything is tailored to your liking. The ability to customize is perhaps one of the biggest draws of new construction. It’s not just about having a roof over your head; it’s about creating a space that’s uniquely yours and loving what you get to come home to every day. 

Cost 

Cost is another factor where new construction tends to shine. Sure, the sticker price of building a home might initially seem high, but when you factor in the potential for lower maintenance costs and higher energy efficiency, it can be a smarter financial move down the line.  

Most new homes are built with the latest materials and technologies, which often means fewer repairs and upgrades down the line. Plus, energy-efficient features like modern HVAC systems, advanced insulation, and eco-friendly windows can save you a lot on utility bills, translating to long-term savings that make up for the upfront investment. 

Between soaring prices and rising rates, the typical home buyer in October paid 77 percent more on their loan, per month, than they would have last year, according to Realtor.com. With a national median asking price of $425,000 and a 10 percent down payment, that works out to an additional $1,117 every month. 

Cost Breakdown Cont. 

As a rule of thumb, it is cheaper to buy a house than to build one, at least when it comes to the upfront costs. Despite prices for both new and existing homes increasing in the last few years, it is cheaper to buy an existing house than to build a new one. The average cost to buy a home is $410,000 to $536,000, while the average cost to build a house ranges from $487,000 to $645,000.  

This does change based on location and you should keep in mind that the price of houses keeps rising. Where you’ll see the most benefit from a higher budget is when you start getting into the price breakdowns of a new build vs renovations, as many existing homes will need upgrades or renovations to fit the style you want.  

Other costs to consider are: 

• Site costs: Home builders have multiple site fees, including those for building permits, water and sewage inspections, and architectural and engineering plans, to name a few 

• Foundation: A new home with a basement will increase the overall costs. But even without one, you’ll still pay for excavation, foundation, concrete, and retaining walls 

• Framing and exterior finishes: Not only do these costs vary depending on the square footage of the home and its floor plan, but you’ll also need to figure in the price for building materials and labor costs (such as your general contractor and any subcontractors) 

• Major home systems: These include plumbing, electrical, and HVAC. Again, labor costs for plumbers and electricians also apply 

• Interior finishes: Don’t forget your custom home’s flooring, drywall, countertops, appliances, and other amenities 

• Plot: Landscaping, outdoor structures, decks, driveways, and cleanup costs 

Building a Home Faster Than You Think 

You know how the saying goes: time is money. And although it might seem like new construction would take longer than shopping for and buying an on-market home, the truth is, with modern building techniques and technology, the process is faster than it's ever been. Prefabricated homes, modular designs, and streamlined construction practices can speed up the build time significantly.  

Many new homes are ready for move-in within a few months of breaking ground, which is often quicker than the time it takes to close on an existing property, especially if you’re dealing with the quirks of real estate transactions. 

And let’s not forget the convenience of modern project management. Many builders are using sophisticated tools to manage construction timelines and coordinate tasks, which reduces the likelihood of delays. This means you could be unpacking in your new home sooner than you think. So, if you’re itching to get into a new space and start making it your own, building a home can be a surprisingly fast process. 

Customization  

Customization is where new construction truly outshines buying an existing home. When you build from scratch, you get to decide on everything—from the floor plan and architectural style to the kitchen backsplash and bathroom fixtures. This is your chance to let your creativity run wild and design a space that perfectly suits your lifestyle. Whether you’re dreaming of a minimalist retreat or a sprawling family home with all the bells and whistles, new construction allows you to bring your vision to life, so long as you discuss these wants with your builder. 

Where costs may be high in the places that matter most, such as adding newer and more durable appliances, you can cut costs by finding affordable solutions in other areas. For example, maybe your dream kitchen features state of the art dishwashers and a sprawling refrigerator that might be over your building budget. You can then opt for affordable recessed lighting as a means of cutting costs and making up the difference.  

On the other hand, buying an existing home means working with what’s already there. Sure, you might find a gem that’s move-in ready, but it could come with compromises. Maybe the kitchen is too small, or the layout isn’t quite what you imagined. While renovations can address these issues, they come with their own set of challenges, including time, cost, and potential disruptions. Building a new home, on the other hand, allows you to bypass these problems from the start and get exactly what you want without the need for extensive remodeling. 

Challenges of Building a New Home 

Of course, it’s not all sunshine and rainbows. Building a home comes with its own set of challenges, particularly when it comes to paperwork, permits, and the dreaded red tape. Navigating local building codes, zoning regulations, and obtaining the necessary permits can feel like you’re wading through a bureaucratic swamp. It’s not uncommon to encounter a mountain of paperwork and unexpected delays as you work through these requirements.  

“Building a home is a complicated process, one that involves multiple players—architects, contractors, suppliers, inspectors and lenders,” says Ron Haynie, senior vice president of Housing Finance Policy for the Independent Community Bankers Association (ICBA). 

But here’s the good news—many builders handle these complexities for you. Reputable construction companies have experience dealing with red tape and can guide you through the process, making sure everything is in order. While it’s important to be aware of these potential hurdles, partnering with a reliable builder can alleviate much of the stress and ensure that your dream home becomes a reality.  

You also need to recognize that you can’t move into your new construction while it’s being built, so in the meantime you may be paying for two homes—where you live and where you plan to move. 

The Joy of New Construction 

So, is it worth it to build a home anymore? Absolutely! The benefits of new construction—customization, cost efficiency, and speed—make it a compelling choice for many future homeowners. While there are challenges, such as navigating permits and dealing with red tape, these obstacles are manageable with the right support. The ability to create a home that’s uniquely yours and enjoy the latest in building technology and energy efficiency makes new construction a worthwhile endeavor.  

In the end, building a new home isn’t just about bricks and mortar. It’s the process, the hard work, and the comfort of knowing that you have exactly what you want. So, if you’re on the fence about whether to build or buy, remember that a new home offers a canvas for your imagination and a foundation for your future. Embrace the journey, tackle the challenges head-on, and get ready to enjoy the many rewards of building your new home.