Buying New. Is it for you?
Advantages and Considerations
Currently, as we settle into the fourth quarter of 2024, in Arizona, there is a noticeable shift toward new construction homes. Buyers in our market are gravitating towards these communities over previously owned houses. This current trend can be attributed to several attractive benefits that come with new-build purchases, making a new build home an enticing option for homebuyers in the current real estate market conditions.
After exploring this shifting trend in the Phoenix real estate environment, we discovered the current advantages of choosing a newly built home over a resale property. As a result, we can provide guidance on how to determine if a new build is the right choice for you.
The Advantages of New Build Homes
Lower Interest Rates from Independent Financing
With the current rapid increase in interest rates, one significant advantage of buying a new-build home is the potential for lower interest rates on your mortgage. Many builders have partnerships with preferred lenders that can offer special financing incentives that result in more favorable loan terms. These lower interest rates can translate into significant savings over the life of your mortgage and a lower monthly payment.
Warranty Protection
In Arizona, new build homes come with builder warranties that cover the property. These warranties are attractive as they can address any potential issues that arise in the first few years of ownership. In contrast, unless specifically purchased from a third party, resale homes usually do not include warranties, ultimately leaving buyers responsible for repair costs.
Ability to Be Involved in Each Phase of the Building Process
A unique experience in purchasing a new build home is that you may have the opportunity to assess and influence the construction process at different stages. You may have the ability to work with the builder to make customizations, select finishes, upgrade appliances and ensure that the final product meets your preferences. Additionally, you can watch the progression from the first dig of dirt to the completion. This level of involvement allows you to create a home that truly fits your needs and style.
Energy Efficiency and Modern Features
New build homes are designed with a focus towards energy efficiency. New construction often incorporates the newest construction methods, insulation materials, and energy-efficient appliances, resulting in lower utility bills and a smaller carbon footprint. Additionally, many new builds can come equipped with modern features that include smart home technology, home automation, and the newest safety features.
How to Decide if Buying New is Right for You
New build homes offer a range of advantages, but they may not be the perfect fit for every homebuyer. Here's how to assess if a new build is the right choice for you:
Budget Considerations: Evaluate your budget and determine if you can afford the price that the construction company is offering. It is relevant to remember that lower interest rates and warranty protections could potentially offset any higher upfront cost.
Timeline: For the purchase of a new construction home, you may have a longer timeline due to the construction process. The construction process will take several months (or more), so if you need to move quickly, an existing home may be a more suitable option. Depending on the market demands, currently, some new home builders already have existing inventory completed and for sale.
Location: It is important to consider the location of new build developments. Is the prospective community in a neighborhood that aligns with your lifestyle and needs? Evaluate proximity to schools, work, and other essential amenities to ensure it meets your requirements. In Phoenix, a developed city, many new home projects are on the outskirts of the city. It is important to consider job opportunities, traffic patterns and proximity to amenities.
Design preference: Do you enjoy the design aesthetic of new homes or do you appreciate the character and history of older properties? If you prefer older properties, a resale home may be a better option.
Resale vs. Warranty: Consider your long-term plans. If you plan to stay in your home for an extended period, the warranty protections of a new build can be advantageous. However, if you see your home as an investment, consider the potential appreciation of a resale property.
The recent increased popularity of new build homes can be attributed to lower interest rates from independent financing, warranty protection, the ability to customize during construction, and energy-efficient features. To decide if a new build is the right choice for you, consider your budget, timeline, location preferences, customization desires, and long-term plans.
Careful consideration of these factors will help you make an informed decision and secure the perfect home that suits your lifestyle and financial goals. Ultimately, whether you choose a new build or a resale home, the most important thing is to find a place where you can create lasting memories and build the life you've always envisioned.