As housing inventories nationwide show decreasing numbers and home building professionals race to keep up with the ever-increasing demand, affordable mortgage rates continue to entice consumers toward the path of homeownership. While purchasing an existing home may cost a buyer less up front, high operating costs can lead individuals to see more value in buying a newly-constructed home.
The National Association of Home Builders (NAHB) recently released information corroborating this idea, outlining the increased savings found in lower utility, tax and maintenance costs.
"Home buyers need to look beyond the initial sales price when considering whether to buy new construction or an existing home," said Rick Judson, chairman of NAHB. "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."
According to NAHB, property data information compiled in the U.S. Department of Housing's 2011 American Housing Survey showed a large difference in cost between homes constructed before 1960 and after 2008. Using information associated with homes' maintenance costs, the organization found those houses built in the 20th century cost about $564 per year, while houses built in the 21st century had annual maintenance costs of $241 each year, on average. In addition, homes built before 1960 had operating costs which totaled 5 percent of the property's purchase price - while residences built after 2008 had an average operating cost of about 3 percent of the purchase price.
New homes offer other benefits to buyers
Although finances may be the deciding factor for many consumers, new homes offer buyers a variety of additional benefits, including increased storage capabilities, open floor plans and modern electrical systems.
"For a family working with a fixed annual budget, new-construction homes offer outstanding comfort, convenience and overall cost savings," Judson said.
National mortgage averages may facilitate future transactions
Nationwide, mortgage records have been kept at low levels for the past several months, allowing interested consumers to pursue advantageous home loans and purchase property.
Freddie Mac recently reported in its most recent Primary Mortgage Market Survey that fixed-rate mortgages showed slight increases in the week ending March 28, although rates are a considerable amount less than their year-ago levels.
Average 30-year FRMs were seen at 3.57 percent last week, having ticked up from 3.54 percent the previous week. A 15-year FRM averaged 2.76 percent, showing an increase from the level of 2.72 percent seen the week prior. On a year-over-year basis, however, each product was improved. During the final week of March 2012, 30-year products were recorded at 3.99 percent and 15-year FRMs were 3.23 percent.