Buying is usually easier, cheaper, and faster, but comes with less customization and the house may cost more to maintain over time.
Location is a big factor in homeownership, and buying often allows a more prime, usually urban location.
Building means you can design the house you really want, but typically comes with more stress and a higher price tag.
In today’s competitive housing markets, building may be an option for buyers struggling to make a winning bid.
You’re ready to take the plunge into homeownership, or perhaps you’re ready to upgrade to a forever house. Yet there’s one big question weighing on your mind: should you buy or build a house?
While there’s no one right answer for everybody, there are pros and cons to each option to bear in mind.
Pros of buying an existing house
Often less costly: Depending on your location and the individual property, buying an existing home tends to be cheaper than building a new one, especially with construction costs projected to rise 14.1% by the end of 2022.
Move quicker: Need to move quickly, or on a strict timeline? An existing house is often ready to be lived in as soon as you close, not on a builder’s timeline.
Location, location, location: In many prime real estate locations (such as near water or close by urban centers), housing has already been developed. If you build, you may not have your top pick of locations.
Cons of buying an existing house
Ultra competitive markets: It’s no secret that housing inventory is currently low for buyers, and bidding on homes has become quite competitive. This is what you’ll likely face if you choose to buy.
More compromise: With an existing house, you may be stuck with a few compromises on layout and amenities unless you’re up for a big renovation project.
Spend more on fixes and upgrades: Existing homes may also have existing issues. You’ll probably have to spend more on repairs and updates than if you build a house.
Pros of building a new house
Customizable: With a new build, you can often customize many features. You can get that layout you’ve always dreamed of and choose unique design features you’ve wanted for years.
Less upkeep: Everything will be new, so there will probably be less repairs and upkeep, and you may even save money on your energy bills thanks to more efficient building standards.
Less competition: There’s usually less competition in the homebuilding space, so you may be able to skip the bidding wars and go straight to planning your dream house.
Cons of building a new house
Unexpected costs: Building can come with unexpected costs, and with materials prices continuing to rise, unplanned expenses can crop up faster than you think.
Financing rates are often higher: Land loans and construction loans usually require higher rates to cover the lender’s risk.
More stressful: Things can go wrong, delays happen, and timelines are constantly in flux. Building a home can be seen as a more stressful process.
This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.
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