How much does it cost to build a house estimates new vs Prefab
How much does it cost to build a house estimates new vs Prefab? Any ideas? Obviously, building a new structure usually costs more. As per the National Association of Home Builders, the median price of a new house in the USA was $401,400 in February of 2016. However, the median price of an existing house was $312,200. That difference can be explained at least partially by the idea that those individual who builds a new house are often investing in larger and more luxurious homes. The median age of an existing, owner-occupied house in the USA is 37 years old, as per the NAHB. In 1980, the median size of a newly constructed house was 1,645 square feet. In 2014, the median-sized newly built home was up to 2,453 square feet. A house that’s nearly 50% bigger is undoubtedly going to cost additional.
Here are some of the reasons why:
- Builder profits - Every new build is going to include some expectation for return, which is part of the reason constructing a new home costs more than buying an existing one.
- More severe energy policies or building codes - One example where constructing a new building can cost more is when laws and rules have changed over the years, says Maury. “It depends on the age of the existing home, new homes might be required to be built to additional severe energy policies, to withstand higher winds, or at a higher elevation based on new FEMA projections for flood risks.”
- The cost of land - When you buy an existing home, the value of property comes with it. Buying a newly constructed home, in contrast, it means hunting down the perfect plot on initial level. And that can be costly, says Yariv Bensira.
- The increasing costs of materials - Where an existing home, and especially an older home, was built with materials that were purchased long ago, constructing a new home require new materials that can be a lot more expensive.
- The Hidden Costs of Constructing a New Home - Many known and common costs that make constructing a new home a costly proposition, a swell of hidden costs can also boost up the price of the building. But some of these expenditures are obvious if you think about them, they still catch people off guard from time to time, and can send your building budget straight out the window.
What are hidden costs? The experts weigh in:
- Window coverings - Windows coverings are come up with an existing home, but can add up quickly if you have a lot of windows or if any are custom, says by the real estate investor and consultants
- Landscaping - Some new builds either do not include landscaping or only include front landscaping,” says Wollschlager. “Depending on the size of your lawn and the detail of landscaping, this can add thousands of dollars.”
- Random incidentals - There are always the unexpected costs, says Wollschlager. These “extras” can include things like picture hanging supplies, decorating items (your old ones never seem to fit the style of the brand-new home), additional cable and electric outlets (they never seem to be where you thought they should go), extra keys and garage door openers. “There are always myriad small expenses that if you add them together can mount to a sizable expenditure,” she says. “Since these don’t always happen all at once, they often get overlooked as part of the expense.”
- Furniture - If you are building a bigger house, you might be surprised at how much more furniture you need. And whether you need more furniture or not, you might find that your old pieces don’t work that well in your new place.
- Upgraded finishes - “The biggest surprise cost in building a new home in a city usually appears with custom upgrades,” says Oregon realtor Kim Krieger. Add in the fact that most builders put in the least expensive paint, plumbing, and flooring at first. Whether you want to upgrade those finishes now or down the line, you’ll need to pay for them.
- Driveways - With a country property especially, the most common unexpected expense is road and driveway building, says Krieger. “This usually costs far more than buyers anticipate, and is often taken for granted.”
- Fences - If you want any expectation of privacy and have close neighbors, building a wall might be a necessity. Depending on the type and size of the fence, this can add several thousand dollars or more to the cost of building a new home.
The Bottom Line
As with anything else, The difference in cost between constructing a new home and purchasing an existing one depends on an entire host of factors. The size and type of house you are interested in will undoubtedly play a part, as well as the location you hope to end up in.
If you are attracted by the plan of constructing a new home, then discuss to a contractor and ask about having a new home built in the same style to the one you like. Find out the perfect price per square foot of the construction, add in the cost of the land, and then relate the total to the amount of existing homes. Just important to make sure you are taking into account everything that might be involved, along with some of the hidden and unexpected expenses individuals do not always plan for.
Either way, do not listen to realtors, builders, or even friends who say one way is cheaper than the other. With several different factors at play, it is impossible for anyone to know with certainty. Constructing a more affordable new home might be less expensive for one individual while buying an existing home and then adding custom renovations could cause another individual’s housing budget to explode.
It pays to blunder on the side of caution and run all the numbers on your own. Whether constructing or buying, the perfect decision you can make is an informed one.