Buyers of newly built homes save an average of $25,335 over the first 10 years of ownership compare to buyers of 20-year-old homes.
That’s according to new research from Realtor.com, which said the savings are driven by lower energy bills and fewer major repairs.
“Homeownership is not a one-time expense, and the ongoing costs of owning a home are where new construction really shines,” said Joel Berner, senior economist at Realtor.com®. “Buyers who focus only on the listing price are missing a significant part of the financial picture.”
Realtor.com said the findings show a wide geographic divide, with New England states offering the greatest advantage and Southern states the least. It identify 16 metros where a decade of savings from new construction fully erases the price gap with existing homes.
New construction savings come in two forms, Realtor.com said. They are: lower utility costs from more energy-efficient construction, and delayed replacement of major systems such as HVAC, roofs, and water heaters.
Five Performance Pillars
Realtor.com’s analysis draws on data from Pearl, whose Pearl SCORE rates every single-family home in the country across five performance pillars — Safety, Comfort, Operations, Resilience, and Energy. According to the analysis, these benefits vary dramatically depending on where a home is located, how cold the winters are, and how stringent local building codes are.
Pearl is a ratings and standards company building the national standard for home performance, Realtor.com said.
To help buyers see these savings in action, Realtor.com said it is introducing interactive total cost of ownership content through a dedicated cost of ownership hub and experience on new construction listings, showing personalized 10-year savings estimates on utilities, roof replacement, HVAC, and water heater costs compared to a comparable resale home. It gives buyers a clearer picture of the true cost of ownership before they contact a builder.
Geographic Pattern
Realtor.com said the geographic pattern is stark.
It said that New England leads the nation in new construction savings, with Massachusetts topping the list at $38,927 over 10 years. Realtor.com said stricter building codes and harsher winters amplify the efficiency advantages of newer homes in these states.
Meanwhile, the South, despite being the most active new construction market in the country, sees smaller savings. Realtor.com said that Less demanding codes and milder climates mean the energy performance gap between new and existing homes is narrower there.
