Exploring the Pros and Cons of Older Homes vs. New Homes

When it comes to buying a home, there are a lot of factors to consider, such as size, price, location, amenities, and even neighbors. If you’re planning to purchase a home, you’ll also want to consider whether a new construction or an existing, older home is right for you.

Recently, desire for newly built homes has surged, as homebuyers often prefer modern appliances and energy efficiency. However, older homes have plenty of advantages, too, such as established neighborhoods, more affordable prices, and central locations.

To make the decision easier, we are sharing some pros and cons for new homes and older homes to help you consider before buying.

Defining new homes vs. old homes

Old homes are those that are at least 50 years old but no more than 100 years of age. 

New homes have been constructed within the last few years.

The pros and cons of buying an old home

The pros

• Established neighborhoods: When you buy a home, of course, it is essential to consider more than simply the house itself. Older homes tend to be more centrally located, closer to downtown and in established communities. Thus, they are unlikely to undergo zoning or developmental changes, making your surroundings more predictable.
• Availability: Existing homes are typically available to move into sooner than a new home or new construction that may be awaiting its finishing touches, assuming that no major renovations need to be made.  
• Long purchase history: Let’s face it: buying a home is a considerable investment. There are many benefits to knowing your home’s purchase history, including its appreciation value over time. While nothing is guaranteed, this can help indicate whether the home you’re looking to purchase is a good long-term investment or not. When considering a new home, there is little to no information to make an informed decision.
• Central locations: Older residential areas tend to be in more desirable locations and closer to city centers, grocery stores, restaurants, public transportation and other attractions. This could also boost your home’s property value because homeowners will pay a premium for easy access to everyday amenities.
• Affordability: Although factors like location and condition determine a property’s price, an existing home in the same area and size as a new construction will generally cost less.

The cons

• Potentially more maintenance or repairs: Whether it’s plumbing or flooring, the roof or leaky windows, older construction means there could be more to fix. While older homes may cost less to purchase upfront, you may spend more on repairs and maintenance.
• Smaller size: Modern homes often come with larger, open floor plans. Older homes were often much smaller and featured smaller, separate spaces. Decades ago, many people had fewer possessions, so closets may be smaller, ceilings may be lower, and room for appliances may be less.
• Utility costs: Materials used to construct homes today have improved. So newer homes have increased insulation, allowing them to retain heat or air better. That isn’t the case for older homes. According to the U.S. Census Bureau’s American Housing Survey, homeowners in old homes spend 17% more on electricity and 38% more on gas per year.
• Outdated compliance: It wasn’t long ago that lead and asbestos were commonly used when building homes. New houses won’t be approved by building inspectors without adhering to current building codes and health and safety regulations. If you’re considering purchasing an existing home, make sure to have it inspected for hazardous materials.

The pros and cons of buying a new home

The pros

• Less maintenance: With a new home built in the past few years, you can expect to reduce expenses that come with upkeep and home repairs for the first fir years. However, all homes need maintenance to keep them in good condition for the long haul, so you’re not completely off the hook.
• Energy efficiency:  According to the Energy Information Administration (EIA), homes built in the United States after the year 2000 are more energy efficient than those built before then. This can save homeowners significant money on utility bills in the long run.
• Safer: Homes that are up to code offer many safety benefits. Newly constructed homes require compliance with stricter safety regulations, and you won’t have to worry about things like lead and asbestos. This can also result in lower insurance costs and higher resale value—on top of being able to sleep easier at night.
• Larger living spaces: Open floor plans have grown in popularity, which has been reflected in newer home construction. This has led to a larger average square footage, more storage space and many open spaces for entertaining.

The cons

• Affordability: The median cost of a new home is more expensive than the median price of an older or existing home. However, this could give you larger square footage, interior features, and amenities.
• Location: With less land near high-value areas, new construction homes tend to be placed further away from city centers, schools, hospitals, etc. If quickly and easily getting to shops, restaurants, or the city center is important, you may need to buy an older home.

‍

Pros and cons based on property type

Old home

New home

Pros

+ Established neighbourhoods

+ Less maintenance

+ Availability

+ Energy efficiency

+ Long purchase history

+ Safer

+ Central locations

+ Larger living spaces

+ Affordability

Cons

- Potential maintenance or repair costs

- Affordability

- Smaller size

- Location

- Utility costs

- Outdated compliance

There isn't a short answer when it comes to which type is best – older homes or new homes. The decision lies mainly in your lifestyle and finances. Deciding which home is right for you is based on a lot of give and take. Always keep top of mind what you want and need out of the home, and the age of the property is only one small consideration.

‍

Nestment, Inc. does not guarantee and is in no way responsible for the accuracy of the information provided in this blog post. All information is provided “AS IS” and with all faults. Data presented here may not reflect all real estate activity in the market.  While the information on this site is about legal and tax issues, it is not intended as legal or tax advice or as a substitute for the particularized advice of your own attorney and tax professional.

‍