Are you postponing the decision to buy a home right now? Do you understand what it costs to play the waiting game? Now sure when to buy a new home? Maybe you should learn the advantages of buying a new home sooner than later.

Home prices will keep rising.

The price of homes continues to rise. In March 2024, home prices in the U.S. were up 4.8% over the same time in 2023, according to Redfin. In some popular metro areas, the prices have soared much higher, like 40.9% in Miami Beach and 17.6% in Charleston, SC. While you’re trying to decide the right time to buy a home, the price is going up. And it will keep heading in that direction. 

Look at it this way. If you have a budget of $400,000 to buy a home, you’ll need to keep raising it while you wait. At the current price increase rate of 4.8%, the $400,000 home will be $419,200 in a month or so. Regardless of the interest rate, you’ll either have to come up with a larger down payment when the price goes up or finance a larger amount.

Equity starts when you do.

The balance between what you owe and the value of your home represents your home equity. The equity you gain in your home begins when you purchase a home and its value rises with the upward shift in home prices. Imagine you bought that $400,000 and the value rose according to the current rate. And kept going. The equity growth potential is one of the biggest advantages of buying a new home sooner than later. 

Marry the mortgage, date the rate.

“Marry the mortgage, date the rate” is a common phrase in home financing. It means that when you buy a home, you commit to owning it, which refers to carrying the mortgage. However, the rate you pay doesn’t have to stay where it is when you close on that home. There are many ways you can “date the rate”.

Rate buydown

A mortgage rate buydown is a financing option that gives you more control over the rate. You purchase discount points, essentially paying the difference in interest between a higher and lower rate. One discount point is equal to 1% of the amount you’re borrowing and purchasing one point will lower your interest rate by about 0.25% (a quarter of one point). If you’re buying the $400,000 home at a fixed rate of 7% for 30 years, you could lower the rate to 6.75% by purchasing a discount point for $4,000.

BUT…

When you’re looking at new construction homes, the builder might be willing to pay for the rate buydown. At New Home Inc., for example, we’re currently offering a substantial interest rate reduction. You save money on your interest rate—which equates to saving on your monthly mortgage payment—at NO COST to you! The New Home Inc. mortgage buydown is a limited time offer and represents another of the big advantages of buying a new home sooner than later. Contact us for details.

Refinancing

As you’re thinking about when to buy a new home, remember that you always have the option to refinance your mortgage, as long as you’re credit-qualified. Just lock in a rate, close on your home, and have the peace of mind that if rates drop, you can refinance the loan. This is another example of “date the rate”. 

You should also keep in mind that when mortgage rates drop, the demand for homes rises, so home prices will rise. If you buy now, you can refinance your home, which you purchased at a lower price than if you had waited.

Increase your down payment

You might also benefit with a larger down payment. By financing less, you might qualify for a lower interest loan. Plus, you’ll be financing a smaller loan amount, so your monthly payment will be lower.

New home inventory is strong.

Currently, the inventory of new construction homes is strong, whereas resale homes are in shorter supply. Homeowners aren’t listing their homes as aggressively as they had done during the pandemic because demand is lower now. 

New construction continues to move forward as builders work to meet the demand they’re experiencing for brand new homes. By choosing to buy a new home instead of a resale, you not only have more inventory available to choose from, but you might also be able to personalize your design choices, depending on the stage of construction. You can buy what is known as a “quick move in home”, which is one that is either completed or nearing completion. Or you can contract the builder to build the home of your choice. With the latter option, you choose every detail, from the color of the roof the fixtures throughout the interior.

Look at the real cost of a resale home.

The price of a resale can be deceiving. If you compare the purchase price of a resale to a new construction home, you might think the resale is the more affordable option. Quite often, the reverse is true.

A resale represents “what you see is what you get.” You might need to set aside funds to make repairs, like the roof, or replacing major appliances. What other changes will this home need in order for it to be “move in ready”? Paint? New flooring? A kitchen or bath remodel? Window replacement?

To get an apples-to-apples comparison of a resale with a new home, you need to calculate the total cost of ownership. What will it cost you to buy AND maintain the home? Once you pay to purchase a resale, can you afford the fix-ups? Do you have the budget for making it the way you’d like it to be? And, if it’s not energy efficient, factor in the difference in monthly utility bills between the resale home and a new construction home that is highly efficient.

A new construction home comes with a warranty. The builder guarantees the structure and construction. All appliances and systems (e.g., HVAC, roof) are covered by individual warranties. You have no worries about unpleasant surprises that could strain your budget.

Picture this scenario:

You find a $400,000 resale home. It’s in your budget, but definitely needs some updating and repairs.

The roof, air conditioning, and water heater will need to be replaced either right away or soon. That could add $20,000 to your total cost of ownership.

The windows aren’t energy efficient. The insulation isn’t comparable to today’s homes. Add in $1,200 a year for additional energy costs. Over a span of 10 years, that’s $12,000.

You’ll need to replace a few major appliances. Tack on $6,000.

You decide the kitchen needs a redo. Maybe you have to compromise and just replace the cabinets and countertops rather than a complete remodel. The average cost of kitchen cabinets is $6,700 and countertops are $2,700, totalling $9,400 for this partial makeover.

Now, add it up:

$400,000 Resale home’s purchase price

$20,000 Replace roof, HVAC, water heater

$12,000 Wasted energy 

$6,000 Replace major appliances

$9,400 Replace kitchen cabinets and countertops

$447,400 TOTAL

That’s a better reflection of the true cost of buying a resale. 

Now, imagine you opt to buy a brand new home for $440,000 and the builder is willing to buy down the interest rate. That automatically lowers your monthly payment. 

Everything is brand new so you don’t have the cost of repairs, remodeling, or replacement. 

The home is designed and built to current standards for energy efficiency, so you gain the benefit of lower utility bills. 

Depending on the new home you choose, you might also have certain other features not included in a resale, like smart home automation. New Home Inc. also includes an electric vehicle charging station rough-in, so you don’t have the expense of installing one in a resale home.

Our homes use CAT6 cabling, which delivers reliable and robust connectivity throughout your home. No dead zones! And no matter how many devices and users are accessing your network, it doesn’t slow down. You can be fairly sure an older resale home isn’t wired that way.

Best of all, your new construction home has never had a previous owner. There’s no question about the quality of the upkeep when you buy the home, no worries that something has been neglected that could cause problems in the future, which is one of the risks of buying a resale home.

New homes for sale near Raleigh

Now is a great time to buy a home, particularly in the exciting Raleigh region. New Home Inc. is building communities of new homes for sale near Raleigh, NC, in some of the most popular suburbs, like Fuquay-Varina, Lillington, Angier, and Clayton. Browse the selection of New Home Inc. quick move-in homes, a variety of townhomes and single-family homes, with both ranch-style and 2-story residences.

Do you want to build a home of your own? We have communities with lots as large as 2 acres. Look at the New Home Inc. floor plans to find the right design. And then let us personalize all the details to your liking.

New Home Inc. adds more lasting value to your home. We use a Future-Proof approach that incorporates long-term vision—not just how you live today but what you will need and want in your home in the years to come. We’ve learned certain key insights into the way lifestyles have evolved. As a result, here are a few innovations you’ll enjoy in a New Home Inc. home:

• The Smart Door Delivery Center is the solution for safely receiving home deliveries. The fully enclosed, climate-controlled space sits between your exterior and interior front doors. The delivery person receives a code to authorize entry only to the delivery space. The door automatically locks afterward, keeping your packages protected from the weather and overly curious passersby.
• Our standard for the kitchen island is an oversized one, with seating on 3 sides that gives you more seating.
• The “messy kitchen” service pantry adds a serving, storage, and clean-up space beyond your kitchen, reducing the clutter and traffic. The messy kitchen is the perfect place to stash things you don’t need on a regular basis, like small appliances, serving ware, and seasonal linens and dishes.
• The drop zone by the garage entry to your home is outfitted with a cubby storage space to help you organize the clutter.
• Our smart home automation package, also included, adds the convenience, security, and energy efficiency of the latest technology.
• We follow the requirements of the ecoSelect Home Efficiency Program, so our homes are independently certified to adhere to the high standards. This higher level of energy efficiency saves you money on utility bills, month after month.

If you’re convinced of the advantages of buying a new home sooner than later, talk to us at New Home Inc. We’re invested in guiding you to the home that fits your lifestyle, budget, and timing.