A newly built home may cost more up front, but buyers could come out ahead over time because newer properties require less maintenance and use less energy, according to a new report. Realtor.com report.
The report suggests that buyers should look beyond sticker prices and consider the long-term cost of homeownership when comparing new and existing homes.
The findings come as housing affordability continues to dominate many Americans’ economic concerns as the midterm elections.
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Newer homes often feature more efficient systems, better insulation, and newer major components that can lower ownership costs. (David Paul Morris/Bloomberg/Getty Images / Getty Images)
Realtor.com found that new home buyers save an average of $25,335 in the first 10 years of ownership, compared to 20-year-old home buyers. The savings largely come from lower utility bills and reduced spending on major repairs and replacements, including HVAC systems, roofs and water heaters.
The study compared homes built in 2025 with those built in 2005, using a standard home size of 1,750 square feet. Researchers have found that newer homes benefit from updated building codes, better insulation and more energy-efficient systems.
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New home buyers can save an average of $25,335 over 10 years through reduced utility and repair costs, according to a Realtor.com report. (Mario Tama/Getty Images/Getty Images)
Savings varied greatly by region, with the New England states experiencing the largest long-term savings. Massachusetts led the country to nearly $39,000 over 10 years, which researchers attributed to colder climates and stricter energy codes.
The Southern States, including ArkansasSouth Carolina, Kentucky, Florida and Texas saw lower savings despite lower upfront costs for new construction. Realtor.com said milder winters reduce potential energy savings.
The report identified 16 metro areas where long-term savings offset the upfront premium for new construction, including San Diego, Salt Lake City, Seaford, Delaware, Salem, Oregon and Madison, Wisconsin.
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The report finds that the financial benefits of new construction differ significantly by state, with the Northeast showing the largest savings over 10 years. (Joshua Lott/Bloomberg via Getty Images / Getty Images)
The researchers also noted that builder incentives, including price reductions, cash flow credits and mortgage rate buydowns, could further improve affordability.
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Realtor.com estimates that new home buyers currently pay mortgage rates about one percentage point lower than new home buyers. existing houseswhich could save more than $30,000 over 10 years.
The findings highlight how operating costs and financial incentives are becoming a more important part of the affordability equation for home buyers.