Home Shopping: Should You Buy New?

By Amanda Gengler @Money

It’s official: After years of little activity, homebuilders are dusting off their jackhammers.

Last year housing permits hit their highest level since 2008, according to the Census Bureau, and new-home sales grew 20% from the prior year.

“Builders are more optimistic than they have been for several years,” says Patrick Newport, an economist at IHS Global Insight.

An untouched abode offers advantages, of course, such as a sleek modern layout and few repairs. Buying an existing home, however, may allow you to seal the deal faster and can offer better short-term price appreciation.

These head-to-head comparisons can help you decide which choice better fits your priorities.

SALES PRICE

Winner: Draw

All else being equal, new structures typically command 10% to 15% premiums over similar existing places. You’re unlikely to be making an equal comparison, however.

“In most of the country the lots in the best locations are already gone,” says David Brown, a Dallas-based housing consultant for Metrostudy. The newest homes are often built farther from centrally located areas and may have smaller yards than their older counterparts, so they can wind up costing less.

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