A Tale of Two Homes: Why Buy New?Posted 04/18/2013
Here’s an interesting fact: despite their higher up-front price tags, new homes cost about the same annually to operate as older, existing homes, all things considered.
That’s the conclusion of the National Association of Home Builders (NAHB), using data from the U.S. Census Bureau and the Department of Housing and Urban Development’s 2011 American Housing Survey. The NAHB announced its findings in early April in honor of New Homes Month.
According to the NAHB’s investigation, homes built before 1960 cost about $564 a year on average to maintain, while home built after 2008 average $241. Similarly, operating costs average nearly 5 percent of the home’s value for pre-1960 structures, but less than 3 percent in homes built since 2008.
Taxes and mortgage payments also play an important role in factoring the affordability of new and existing homes. Taking into account the year the house was built, purchase price, mortgage payments, annual operating costs and income tax savings, NAHB officials compared the first year after-tax cost of ownership for both types of homes. They concluded a buyer can afford to pay 23 percent more for a new house than for one built before 1960 and still maintain the same amount of first-year annual costs.
True, mortgage payments are bound to be greater due to the higher purchase price of a newly built home. But, the lower operating costs balance out the difference, resulting in annual costs that are about the same as if the buyer had purchased a less expensive, older home with a smaller mortgage payment and higher operating expenses.
The take-away lesson here for prospective home buyers is clear: don’t be too quick to write off the affordability of owning a newly built home. It’s possible that spending a few extra dollars on an energy-efficient new home will pay off with budget-friendly annual operating costs.
- Spruce Up Your Space for Spring
- Things to do this spring in Phoenix and Tucson
- Introducing the year’s hottest interior trends: Desert Modern & Southwestern
- Living the Good Life at Rio Paseo in Goodyear
- In Your Neighborhood: Valentine’s Day Edition
- Living Like a Local at The Lakes at Annecy
- Live Like a Local in Chandler with Our Windermere Ranch New Home Advisors
- Maracay Celebrates Three Grand Openings to Kick Off 2019
- New Year, New Home: 3 Tips for Homebuyers
- Good Times by Design: Holiday Entertaining & Floor Plans at Avance