Benefits of Buying Now
If you are considering buying a newly constructed home, now is the perfect time. According to data from the Census Bureau and Department of Housing and Urban Development's 2011 American Housing Survey, the National Association of Home Builders (NAHB) found that buyers can purchase a higher-priced, newer home and achieve the same annual operating costs as an older, existing home.
NAHB's study first looked at how utility, maintenance, property tax, and insurance costs vary depending on the age of the structure. It found that homes built before 1960 have average maintenance costs 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 when the home was built later than 2008.
The study then compared the first-year, after-tax cost of owning a home by the year the house was built, taking into account the purchase price, mortgage payments, annual operating costs, and income tax savings. This data showed that 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.
While mortgage payments may be greater with the higher purchase price of a newly built home, the lower operating costs mean the home buyer will have annual costs that are about the same as if they'd bought a lesser-priced, older home with a smaller mortgage payment and higher operating expenses.
Many factors determine the choice between a new or existing home. While newly constructed houses often include open-space floor plans, abundant storage options and home entertainment centers, houses in established neighborhoods may feature mature landscaping and trees, handcrafted built-ins and distinctive exteriors. The decision is unique for each home buyer.
NAHB's study first looked at how utility, maintenance, property tax, and insurance costs vary depending on the age of the structure. It found that homes built before 1960 have average maintenance costs 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 when the home was built later than 2008.
The study then compared the first-year, after-tax cost of owning a home by the year the house was built, taking into account the purchase price, mortgage payments, annual operating costs, and income tax savings. This data showed that 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.
While mortgage payments may be greater with the higher purchase price of a newly built home, the lower operating costs mean the home buyer will have annual costs that are about the same as if they'd bought a lesser-priced, older home with a smaller mortgage payment and higher operating expenses.
Many factors determine the choice between a new or existing home. While newly constructed houses often include open-space floor plans, abundant storage options and home entertainment centers, houses in established neighborhoods may feature mature landscaping and trees, handcrafted built-ins and distinctive exteriors. The decision is unique for each home buyer.
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