Buying a New Home Could Save You $25K Over 10 Years vs. Buying an Older Home
A new-build home sounds like an enormous expense compared to an older home, provided the latter doesn't immediately need any major upkeep or renovations. But looking at the numbers, it could be a much closer horserace.
New construction homes typically cost more upfront — about $60,000 more than older homes, according to Realtor.com. But over time, buyers could actually come out ahead financially by choosing new construction, the recent report found.
Settle In: 50 Cheapest, Safest Places To Live in the US
Grow Rich: 9 Subtly Genius Things All Wealthy People Do With Their Money — That You Should Do, Too
If you can afford the upfront cost, here's why buying a new build can save you significantly over time.
New Homes Can Save Buyers $25K Over 10 Years
According to the Realtor.com report, an average new home can save its buyer $25,335 over the first 10 years of ownership compared to the buyer of a 20-year-old home.
"These savings come from not having to replace common home fixtures like water heaters, HVAC systems and roofs," said Joel Berner, senior economist at Realtor.com, "and also from spending less on utility bills to heat and cool the home because of better insulation in homes built to more recent energy codes."
Berner also noted that many builders offer below-market mortgage rates to new home buyers.
"Many home shoppers will find that their budget is expanded when considering new construction instead of existing homes," he said.
Win Big: Enter for a Chance To Win $500 in MoneyLion's Summer Break Giveaway (No pur. nec. Ends 7/4/26. See Official Rules at mlion.info/summerbreakofficialrules)
Where New Construction Pays Off Most in the US
The cost-saving advantage of new construction varies widely from state to state and from city to city, with colder climates and high utility costs driving the biggest gains.
Top States Where New Homes Save the Most Money
The report found that savings tend to be the greatest in New England, where utility savings are the most significant due to cold climates and high heating costs. These are the top states for 10-year total new-construction savings:
Massachusetts: $38,927 total savings
New Hampshire: $35,885 total savings
Maine: $34,763 total savings
Rhode Island: $34,641 total savings
Vermont: $33,998 total savings
Top Cities for New Construction Savings
There are some metros where new builds are already priced cheaper than existing homes, typically because these new builds are located in far-out parts of the metro area. When these metros are excluded, these are the top cities where 10-year savings overcome new-construction price premiums:
San Diego-Chula Vista-Carlsbad, California
St. George, Utah
Salt Lake City-Murray, Utah
Seaford, Delaware
Salem, Oregon
These metros are primarily located in the South and West, where new-construction activity is strong. This keeps the cost differences between new builds and existing homes low, so utilities and maintenance savings add up quickly.
Summer spending adds up fast. Enter MoneyLion's Summer Break Giveaway for a chance to win $500 — and give your budget a break. (No pur. nec. Ends 7/4/26. See Official Rules at mlion.info/summerbreakofficialrules)
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion:
How Middle-Class Earners Are Quietly Becoming Millionaires — and How You Can, Too
4 Financial Decisions Young Adults Make That Are Hardest To Undo