You, too, can buy newPosted 03/11/2014
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.
According to the NAHB’s investigation, homes built before 1960 have an average maintenance cost of $564 a year, while a home built after 2008 averages $241. Similarly, operating costs average nearly 5 percent of the home’s value for pre-1960 structures, while they average 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, the NAHB compared the first year after-tax cost of ownership for both types of homes. The results indicate 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. Other benefits of owning a new home include open floor plans, enhanced storage options and energy-efficient construction that adheres to modern codes and standards.
One of the take-away lessons to be learned from the NAHB’s study is that prospective home buyers shouldn’t be too quick to write off the affordability of owning a newly built home. Taking a moment to look beyond the initial sales price just might prove it’s possible to spend a few more dollars on a new home and still achieve annual operating costs that fit within the budget.
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