Americans may be able to buy a higher-priced home if they buy new, according to a study by the National Association of Home Builders. The NAHB study — using data from the Census Bureau and Department of Housing and Urban Development — suggests due to lower operating costs with new-homes buyers can purchase a newer home that is more expensive and still achieve the same annual operating costs as an older, existing home.
The study evaluated how utility, maintenance, property tax, and insurance costs vary by the age of the home.
Homes built prior to 1960 had an average maintenance cost of $564 per year. However, homes built after 2008 had average maintenance costs of $241, according to the study.
“Home buyers need to look beyond the initial sales price when considering whether to buy new construction or an existing home,” says NAHB Chairman Rick Judson. “They will find that with the higher costs of operating an older home, they can often afford to spend more to buy a new home and still have annual operating costs that fit their budget.”
The study found that homes built prior to 1960 have operating costs that average nearly 5 percent of the home’s value compared to less than 3 percent if the home was built after 2008.
“While mortgage payments will 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,” NAHB notes.