How Much Does It Cost to Build a New Home

Building a new home gives you complete control over what it looks like and what features you’ll find inside. People tend to think that buying a home is a much cheaper alternative to building one, but new research indicates that building a house may actually be more affordable in some parts of the country than buying an existing home. When searching for a new home in Portland, Oregon, for instance, shoppers should evaluate the cost of building a new home vs buying an existing one.

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The Cost Difference

While building a home may cost more, it often costs less than you would expect. Experts estimate that new homes cost around 15% more than an existing home, but depending on where you look, the price might rise by as much a 30%. According to the National Association of Home Builders, an existing home will cost around $210,000 but a new home will cost closer to $259,000. Keep in mind thought that the additional cost lets you decide on factors like what the exterior looks like, the amenities in your kitchen and bathroom, and even the general layout of the house.

Compare Similar Layouts

The problem is that many home shoppers make the mistake of comparing homes that are not similar. When you work with a real estate agent, you can request that the agent pull up comps, which are the prices that similar homes sold for in the near past. If you need a house with three bedrooms, a large backyard and a garage that can accommodate two cars, you shouldn’t look at houses that come with less features. New homes are typically larger and come with more amenities than older homes, which can make comparing prices difficult.

Do Some Work Yourself

Another thing to keep in mind is that you have more options when buying a new home. Many builders will now let you save on the total cost with some work that you do yourself. Painting the walls, putting down flooring or doing some of the landscaping on your own can drop the price significantly and make that new home just as affordable as an older home in the same neighborhood.

Add-Ons & Updates

A common reason why many new homes cost so much is because the people having the house built add on options that increase the cost. While you can get a new home built for a low price, any add-ons you opt for will significantly increase the overall cost. Swapping on basic counters for those made of granite, asking for built-ins in the living room or bedroom, switching simple laminate floors for hardwood floors or even requesting an HVAC system will increase the price of that home.

You may also find yourself paying for things that you wouldn’t pay for when buying an existing home. An older home may come with a gorgeous deck, a fence that surrounds the backyard and nearly new kitchen appliances. When you move into a new home, you’re responsible for buying all the appliances that you need. You may also need to pay extra for the contractors to add a deck or patio or for them to build a fence around the yard.

Don’t Forget the Architect

The builder isn’t the only professional you must hire for the job either. You need to work with one or more architects to draw up the designs for the home. Any changes you make to the original design with require additional drafting, which will increase the price. Sticking to the original plan and a basic design can help you save, but custom homes can cost hundreds of dollars per square foot, which is usually higher than an older home will cost.

Cost Vs Time

You also need to factor in how long it will take for builders to finish the home. A general rule of thumb says that you should plan on waiting at least six months before you can move into your home. If you opt for a highly customized design, it may take a year or longer to build the house. This means that you’ll pay out extra for an apartment or a rental home. With an older home, you can usually close on the property and move in within a few months.

After looking at all the costs associated with new home construction, you might wonder why you should build a home in the Portland area. The biggest benefit of working with a builder is that you can design your dream home. You can add all the features you want, opt for multiple bedrooms and even select outdoor features too. New homes also come with fewer risks than older homes do.

When you buy an older home, you must hire an inspector to look over the property. Even with a full inspection though, you might face problems like an HVAC system that fails on the coldest day of the year, pipes that leak inside the walls and termites that feed on your home. There is also a risk that any appliances that come with the home may require expensive repairs just weeks or months after you move in with your family.

New homes come with all new appliances, fixtures and features. You can move in and rest assured that you won’t face high repair bills anytime soon. If you do have any problems, you can take advantage of the warranty that your builder offered. This warranty may cover everything from missing shingles on the roof to foundation damage that appears after a flood.

These homes also have a number of stylistic advantages over their older counterparts too. Open layouts let you view multiple areas of your home from one central focal point and make entertaining much easier. You can opt for other stylistic elements too, including master bedroom suites that come with walk-in closets and private bathrooms, impressive entryways and taller ceilings. Builders can also add in new features that help you save on electric and utility bills, including energy-efficient windows, appliances with an Energy Star rating and low-flow toilets.

While it’s true that new home construction costs more than older homes, many find that these homes are worth the price. You can build a home in the Portland area for as little as $200 per square foot, which is on par with the cost of older homes in some neighborhoods.