Dreaming of a new construction home? The appeal goes beyond freshness and trendiness; it's also an economical choice in today's market. With the median mortgage payment inching towards $2,200, buyers are eager to save, and builder-offered incentives are on the rise, potentially saving a buyer with a $500,000 budget $40,000 or more in the first homeownership year.
Here's how buying new enhances affordability:
Builders are Reducing Prices:
Although new homes typically cost slightly more than existing ones, nearly a third of home builders cut prices in October, with almost 40% reducing prices by 6% or more.
Lower Mortgage Rates:
Builders offer lower mortgage rates through buydowns, with 29% of builders providing mortgage rate reductions in October. These buydowns can be permanent or temporary, saving over $10,000 in interest during the first year.
Assistance with Closing Costs:
Builders are pitching in on closing costs, with 35% offering support. This can be a significant relief, covering around 2% to 6% of the total loan amount, up to $30,000 on a $500,000 loan.
Affordable New Home Insurance:
New homes often have more affordable insurance premiums due to fresh materials and construction, posing less risk to insurers. On average, insuring a new home costs 13% less annually than a 10-year-old home and 32% less than a 30-year-old home.
If you opt for new construction, always get a home inspection to ensure it aligns with your expectations. Explore the dream of a new home with potential savings and added perks!