Old Homes With Character Or New Build Designs – Which One Is Best?
There is becoming an age-old debate about whether new build homes or old houses with character are the best. One thing is for sure, whatever you’re in the market for, there isn’t much of it. There is a near-record low supply of houses in the US, making it almost impossible to move home. To be precise, the US is short of around 5.4 million homes that buyers are waiting to get their hands on.
But with tons of new build home contracts in the pipeline, is it best to wait and buy a new build home, or are older houses full of character the better option? Let’s explore.
The Perks Of New Build Houses
New-build homes won’t appeal to everyone – but that depends on what you’re looking for in a home. The first perk of a new build home is the design input that you have. New builds homes are essentially a blank canvas, with the only things set in stone being the number of rooms and bathrooms – everything else is a skeleton. That gives homeowners the chance to design the home from the ground up as they wish to.
Some property developers also throw added perks into the build, such as homeowners insurance with a warranty on specific parts of the house and other guarantees that provide security for new homeowners. That is very developer-specific – some property developers offer nothing more than the home itself.
Some developers also provide deals specific to homes. For example, if a buyer is in the market for a two-bed house, they might put a developer discount on the price and throw in extras such as bathroom tiling or carpeting for free. Again, this depends on the developer and what they’re willing to offer.
The Lure Of Older Homes With Character
Older homes with character are perfect for people looking to renovate or simply move into a home that’s ready to move into. With new build homes and the current shortage of said new build homes in the US, the waiting time to move into a new build home could be years – whereas the waiting time for an older home might be a few months if there’s a chain involved.
Older homes generally come with more value for money. Although the cost of older homes has increased slightly over the years, especially in 2024, it’s not as steep as the increase in new homes. In 2024, the average price of an existing home was $372,400, whereas the average cost of a newly built home was $417,000.
There’s also more freedom to decide where you want to live. Newly built homes are limited to the plot of land the developer chooses to build on. But older homes are for sale on nearly every street in every state. Those locations are often prime locations, which means they’re also an investment for buyers in the market for an older home.
The issue with some of the plots of land new build homes are erected on is the land itself. Environments are rapidly changing, and natural disaster events are becoming more frequent, causing 14.6 million houses in the US to be at risk of flooding. Natural disasters are events covered by most home insurance policies in the name perils section, as well as theft, vandalism, falling objects, aircraft damage, and riots. Click here to learn more about named perils.
The Downsides Of Both
As with anything in life, there are downsides to buying a brand new home and an older one. One of the downsides of buying a new build home, for example, is that it’s harder to get a mortgage. Mortgage and homeowner loans in the US are rising just as the cost of houses is, making it difficult for first-time buyers, in particular, to get accepted for a loan. Couple that with the fact that new-build homes are slightly more expensive on the market than older ones, and the cost implications of a new build home aren’t suited to everyone’s finances.
One con of buying an older home is the lack of security. With a new build home, buyers are protected with structural warranties for the first few years. With older homes, structural issues are more common and could cause cost implications for buyers within the first few months. For example, homes older than 20 years might need electrical rewiring or new plumbing work, or the actual structure of the house might be compromised.
Whether it’s a new build property or an older home, the housing market in the US is making it hard for anyone to join. It’s not just home loans and mortgages that are hard to find – the rising housing prices make the market almost impossible to enter. In March 2024, housing prices across the US grew 17.5 % YoY. Couple that with a 31-year high in inflation rates and the cost of living causing a pinch, and you’ve got a recipe for a seller’s market. What that means is the housing market is more in favour of sellers.
Buyers in the market for a new or old house should consider the current state of the market and whether it’s worth waiting for the market to stabilize. The latest article by the Washington Post states that mortgage rates are predicted to rise to 5.5% by the end of 2024 and that the market will remain a seller’s market until 2024. Experts also predict that housing prices will continue to rise by an average of 10.8% across the US. The most sensible decision might be to wait until 2024.
What one should you buy? The answer to that question depends on budget, what you envision your dream home to look like, and what houses are on the market. People looking to buy a home within the next few months might be better suited to looking at the old house market, whereas people who want a brand spanking new home and can afford to wait a year or two should consider looking more into new builds.
