When Michigan couple Pete and Kelley Di Martino decided to purchase a home, their original plan was to buy an existing property. Along the way, that strategy didn't turn out the way they had hoped.
"When we did start looking at homes in the spring, we just weren't really finding a lot in terms of existing homes that we liked, especially in the price range we were looking for," Kelley Di Martino, a 38-year-old real estate agent, told Homes.com. "They were just going to come with a lot of updates, and we were kind of at the max part of our budget."
Eventually, the couple from Mattawan switched plans and bought a newly constructed home.
A shortage of existing homes motivated the Di Martinos and others nationwide. Nearly 20% of U.S. buyers looking to or having already bought a newly constructed home said they did so because of limited inventory, a new Homes.com survey found.
For its New Construction: What Buyers Want Survey, Homes.com partnered with YouGov in May to poll more than 1,000 people age 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. The survey posed questions to first-time homebuyers and people who previously owned a house. See the full methodology.
The survey results indicated that 32% of respondents are also looking to purchase or have purchased a newly constructed home because they want a larger house or more outdoor space. Expecting to expand their family and entering a different school district are also driving new-build purchases, according to the survey.
Pete Di Martino, 41, an operations manager at a wholesale grocer, said he and his wife moved into their new build in May. He noted how it's common practice for homebuilders to offer a repair warranty for the first few years.
"If anything happens, it's usually covered by the homebuilder," he said. "So, we take comfort in that, when we buy a new home, if there are any issues, that it's fixed."
There's a large swath of U.S. homebuyers who either can't afford or aren't motivated to buy an existing home and repair the damages they may encounter, said Paul Macero, owner of MBA Builders in Wakefield, Massachusetts. Those buyers skip those fears by purchasing a new build, he added.
"Existing homes generally come with deferred maintenance or [they] are in need of updates," Macero said. "These costs vary greatly and are accompanied by the inconvenience of having to contract and live through the work. That’s on top of absorbing the cost of the work added to the initial sale price."
For the most part, new homes are move-in ready and are maintenance-free for the first seven to 10 years they exist, saving the owners money in the long run, Macero said.
Buyers seek advanced home systems
The survey also found that new-construction homebuyers are interested in the updated fixtures and amenities a new build brings. For example, 36% of respondents said having energy-efficient appliances was a main reason for buying new. Another 28% of respondents said smart technology drew them to purchase a new build.
Those results don't surprise Matt Marovich, a partner at Florida homebuilder Alair Homes.
"Clients often want advanced systems such as home automation, energy-efficient construction, high-performance insulation, zoned HVAC, water filtration and modern security features," Marovich said. "Retrofitting these into older homes can require tearing out walls or ceilings, upgrading electrical panels and extensive rewiring, making it costly and disruptive. A ne- build integrates these systems from the start."
When it comes to purchasing a new build, the motivations differ between first-time homebuyers and experienced homeowners, the survey found. For example, 44% of first-time homebuyers said they're looking for a new build because they've grown tired of renting, while another 37% said they feel financially ready to make the purchase.
Meanwhile, 35% of previous homeowners surveyed said they want a new-build because they've experienced a life change — like a divorce or new job. Another 30% of previous homeowner respondents said they want a larger home or outdoor space.