Most homebuyers make a decision toward purchasing a new home for the ease and modern design, a new survey from Homes.com indicates.
For its New Construction: What Buyers Want Survey, Homes.com partnered with YouGov in May to poll more than 1,000 people aged 25-plus who have incomes of at least $50,000 and either purchased a new home in the past two years or plan to buy a newly built property in the next two. See the full methodology.
Overall, buyers selected new homes for their “future-ready” qualities that they believe will promise comfort, safety, performance and beauty into the future.
The top reason they opted for a new construction home versus an existing house was for its modern design and customization, selected by 46% of surveyed homebuyers.
Homebuilders often engage in research and with design professionals to curate home designs that meet the needs of buyers today. With existing homes, those residences likely met the needs and designs of the time the home was built.
A big plus to the modern design, builders say, is not needing to remodel after moving in.
“When purchasing a used home, those choices and styles are someone else’s, often worn or outdated, creating a significant cost implication of replacement,” said Fischer Homes CEO Tim McMahon in a statement.
Customization is dependent on the builder. Many that offer move-in homes have no opportunity for customization, and some offer only additional upgrades. Higher-end builders will provide custom options.
On the other hand, resale might appeal to different buyers who look for more affordable options and greater variety in design, said Holland, Michigan, agent Heather Davis, who assists buyers with both new and resale homes. Resale homes leave more room for negotiation on price compared to new construction, she said.
"Established neighborhoods with mature landscaping is a huge draw," Davis said in a statement. "They also typically have more unique character and charm."
New homes offer less maintenance and better performance
Many surveyed homebuyers, 39%, opted for a new home because they believe it will provide lower maintenance costs. Builders say the homes built today offer high levels of insulation, improved performance, and no need to replace HVAC, a roof, siding, or any mechanicals.
Another 36% of surveyed homebuyers cited energy efficiency as a main reason to purchase a new home versus an existing one.
“The building changes that have happened in the last 20 years that I’ve been in it are amazing,” said Jim Work, founder of Silverthorne Homebuilders. “It's more than energy efficiency."
Modern building codes also work to keep homeowners safe and to ensure structurally sound homes. Health and safety standards were selected as a reason to buy new versus existing by 32% of surveyed homebuyers.
In Work’s opinion, the biggest benefit to a new home versus an existing one is the warranty that comes with it. If issues arise in the home, the builder will often cover those by sending in an in-house warranty team.
Other drivers motivate desire for new home
A lack of home supply and interest rate concerns were not major determinants for homebuyers when deciding between a new or existing home.
Just 18% of surveyed homebuyers said limited inventory of existing homes pushed them to purchase new, and 15% cited interest rate concerns. Many national homebuilders have been offering sales incentives like mortgage rate buydowns to attract buyers, helping to secure lower monthly payments. Some buyers chose new due to these financial incentives (20%).
The other main reasons for selecting a new-construction home versus an existing one were smart-home technology (28%), community amenities (25%), appreciation potential (20%), the fast-moving market (14%) and price escalation (12%).