The 2020 housing market should be good for people looking to buy. Experts expect mortgage rates to stay below 4 percent. But if you’ve been looking for a while and none of the houses seem right, you may be asking yourself, “Is it cheaper to build a house or buy one?”
That depends on a variety of factors, including where you live and what you’re looking to build or buy. Read on for the pros and cons of building versus buying.
Is It Cheaper to Build or Buy a House?
New houses tend to cost more. They don’t always, but you should expect to pay more for a new house than one that’s had prior owners. A new house must abide by new construction and building codes. The house your grandparents lived in for 50 years may seem cozy, but it’s also less safe than a brand new home built to modern standards. If you don’t want to deal with as many rules about what you can build, you’re better off going outside city limits. Unincorporated areas often have less stringent rules for new home construction. Then there’s the price of land. It’s not something you think about when you’re browsing pre-existing homes, as the lot comes with the house. But you need land before you can build a house. And if you live in a high-priced area, you can expect to pay quite a bit for that land.
What about a driveway? Those aren’t cheap, either. And you’ll need one unless you’re fine parking on the street. Starting from scratch and building a house is rewarding, but it’s also challenging. Think long and hard about the extra costs when you start talking to builders.
The Pros and Cons of Building a Home
If you’re picky, building a house can seem like the perfect solution. You don’t have to choose from houses other people built. Instead, you can design one of your own. But it’s not that simple. The builder has a list of options that you’ll pick from. You can’t usually go beyond that.
Asking for something they don’t have is like going into a seafood restaurant and asking for a grilled cheese. If it’s not on the menu, maybe you belong at a different restaurant. Yet new home construction does still offer way more options than just buying a standard house. If you like digging down into details, you’ll like this part. But know that you don’t have endless choices for features like windows and carpet. Speaking of which, don’t expect a lot of negotiating power when you meet with a builder. Some homeowners will be desperate to sell and willing to go below market value. But builders don’t have that urgency. There’s no house yet, so everything is still hypothetical.
Is It Cheaper to Build a House?
Is it cheaper to build a house? It’s usually not. That said, it could still be the right answer for your situation. Take the temperature of your local housing market before deciding if you want to build or buy.
Look at our real estate section while you’re deciding. And never apologize for making the best decision for your family.