It’s so exciting to be a first-time homebuyer but there is so much to consider. One of the big decisions you’ll have to make is if you prefer a new construction or an existing home. Every buyer’s situation and home purchase transaction is unique, which is why it’s so important to spend some time as a buyer figuring out what is most important to you.
Here are some things for first time buyers to think about when deciding if new construction or existing homes are best for them.
New vs. Existing Home: Pros and Cons
Before I get more in-depth below, here’s a quick breakdown of the potential pros and cons for each option. Keep in mind that these could vary depending on the actual home being considered.
New Construction
Pros
Opportunity for customization
Builder incentives
Home warranty
Cons
Potentially higher cost overall
Less customization that you might realize (depending on situation)
Existing Home
Pros
Older homes might have unique features not found in modern homes
Can get into the home faster
May get more square footage for your dollar
Cons
More likely to need repairs and maintenance sooner
Less opportunity to customize the layout and look
Could be more competition in a low inventory market
What First-Time Buyers Are Really Comparing
If given the choice between something brand new and something lived in, most people might assume that the new construction was the way to go. But there is more that goes into the decision. When I sit down with prospective homebuyers, it usually comes down to three main things:
Maintenance: The appeal of a new construction is that you generally don’t have to worry about things breaking down for a long time. In comparison, on a resale home, common questions to ask would be how long is the roof going to last? How long is the HVAC going to last? How much money am I going to have to put into it?
Price tag: In some ways, this one is related to maintenance in that you might decide you need to put in X number of dollars to an existing home that you buy to maintain it, and that should be added into your cost. But on its own, price tag is a huge factor that will ultimately determine which route to go for most people. What are you getting for what you can afford? Oftentimes, you can get “more house” from a resale.
Customization: What do you want your house to look like? How much control do you want to have over that? You could walk into a resale home and it has everything (or most things) you want minus a few style choices, but it can take time to find that “perfect” home. With a new construction, you will have varying degrees of customization options depending on if it’s fully custom, semi custom, or already built (like a spec house), but premium upgrades or major changes can increase your cost.
Financial Pros and Cons for First-Time Buyers
Buying your first home is almost always the biggest financial decision of your life, so it’s important to weigh your options and understand what you’re getting for your money. It’s usually the case that new construction homes will be more expensive, but market changes can impact prices. For example, there were two quarters in 2024 where the median existing home price exceeded the new home price, even though that’s usually not the case.
With new construction, you're typically paying a higher premium for the newness of the home as well as for the piece of land and builder warranties. There is oftentime many other soft costs that can come into play as well. For example, if you have to bring electricity to the property, put in a well and a septic, or clear the land of trees and space to move in construction vehicles. Finally, new construction homes may have Homeowner’s Association (HOA) fees on top of the mortgage to pay for amenities or maintenance like landscaping.
On the plus side, builders sometimes offer incentives such as money towards your closing costs so you don't have to come in with too much money out of pocket.
With resales, it really depends on the condition of the home you’re buying. Say you find an existing home that needs a new HVAC system and a new roof. As a rough estimate, that could cost around $25,000. But that might still be more cost effective than getting the new construction home. On the other hand, if it's a true gut job that you're going to have to dump $100,000 into it to get it up to par, that’s a whole other set of considerations.
Ultimately, what you need to consider isn’t just the pricetag on the homes – it’s what will come out of your bank account each month, and what it will cost you upfront before you move in. Those are the figures you need to make a true comparison.
How Market Timing Affects the Decision
The current real estate market might influence your decision for buying a new construction versus an existing home. Data from the National Assoication of Realtors (NAR) shows that while new construction listings have climbed 37.3% since the first quarter of 2020, existing-home listings are up just 15.4%. However, the growth in existing homes has been most noticeable in 2025. This data corresponds with what I’ve seen over the last few years.
If you go back two to three years ago, inventory on resale homes was very low, and so were interest rates. Everybody wanted to go out and buy and the competition was insane. Because so many buyers couldn’t buy homes in the resale market, their only option was to turn to new construction where there didn’t have to deal with bidding wars.
Right now, we’re starting to move in the other direction, however. We're noticing that sellers are having to drop their prices and houses aren't selling as quickly. Interest rates are also starting to tick back down. In other words, when the market shifts, people's desires or needs shift with it.
Of course, personal timelines can matter more. One example is a former client who is a military service member. He was interested in buying a new construction home in an area new to him, so we looked around at different neighborhoods. We got as far as finding a spot and discussing floor plans, but then when we started talking about timing, he came to the realization that new construction wasn’t going to work for him since he wasn’t sure if/when he might be deployed. The 8- to 12-month timeline was just too long.
He ended up going the resale route and we found him a nice, newly renovated home. It was a good reminder that there's a lot that can happen in a year whether it’s the market or interest rates, but sometimes waiting doesn't make sense.
Customization vs. Character
In the battle between new construction vs. existing home, one of the big factors is how much control you want over the look and feel of the home. For some, the idea of getting to have a say in the floor plan and pick out paint colors and countertops is exciting, while others might want more of a “move-in and deal with it later” experience.
One thing to be aware of is that new construction homes have different levels of customization options.
Fully custom build: You’re buying a piece of land, clearing it, and having a builder create a design with you.
Semi-custom build: A builder owns the lot and you choose your floorplan and from a menu of features. You might be allowed to make a couple of structural changes early on, or you might not.
To understand how much input you will have requires an in-depth conversation with the builder.
Builders are pretty upfront and a good realtor can also help set expectations as well. Once the house is framed and the bones are up, the window for making certain changes may close, but you still may have plenty of time to choose your countertops, for instance.
With existing home sales, it’s more at your discretion if you want to make large changes to the structure or update room elements, and that comes down to if your budget allows for it, and if you want to do it upfront or over time. In some cases, older homes might also offer architectural features that you don’t find often in more modern homes, and you might prefer that uniqueness over moving into a development with houses that all look generally the same.
Maintenance, Warranties, and Long-Term Risk
One of the advantages of new construction homes is that they often come with warranties built into the cost, so it may be a few years until you start to have the out-of-pocket maintenance costs that a resale might have starting on day one. It’s important to understand exactly what’s covered and for how long, and to make sure you ask questions about how claims are handled.
1/2/10 Structure For the Warranty
A typical new construction warranty may have what’s called a 1/2/10 structure.
Year 1
For one year, you get a sort of “bumper-to-bumper” warranty in which anything that goes wrong is covered. Then usually at the 10 or 11-month mark, the builder may come back out to the house and take care of any small items.
Year 2
The two-year part of the warranty will typically cover your mechanical components like your HVAC systems, hot water heaters, water softeners.
Year 10
And then the 10-year part covers structural components like your crawl space, your floors, etc.
My advice is to try to choose a builder that has an actual warranty department so that if something goes wrong, you've got a dedicated number to call. I have seen some builders develop a bad reputation for not following through on warranty items when they should.
With an existing home, the inspection is super important so that you know what you’re getting into. You should also plan to be more on top of maintenance since you won’t have a warranty or builder to fall back on. I always recommened trying to keep some cash reserves to handle any repairs that may come up, and to also budget for regular preventive maintenance like tune-ups to your HVAC and cleaning your gutters, which can save money down the line.
Emotional Fit and Lifestyle Factors
This may sound sort of corny, but I think no matter which type of house you buy, it has to give you the right vibes and you have to be able to picture yourself living there. There are needs versus wants, of course, and the house should check the majority of your needs first. Then, you can focus on the wants.
To use myself as an example, when I was home shopping, I had a dog and she was everything to me, so I knew I needed a big backyard that was fenced in. Some buyers might want a specific number of bedrooms, or need a large garage to support a hobby, or whatever the case may be.
But all that said, I walk houses with buyers all of the time, and sometimes they'll walk in and say, I know this house sounds great, but it just doesn't feel right, or this isn't good. And whether it's right or wrong in my mind, once they’ve said that, we've got our answer and we move on.
Final Advice for the Undecided First-Time Buyer
Deciding between a new vs. existing home is one of the big upfront decisions buyers need to make. The way we get there starts with a consultation where I get to understand all of their needs. We sit down in my office and we talk for about an hour and they tell me everything that they want in a house. I ask them to paint me a picture of what their future looks like.
This helps me to understand what their vision is and this is a baseline to help us narrow down options. The other piece of this is that I encourage first-time buyers not to rush. There are certain situations where people have to move quickly, but if you’re not in one of those situations, take your time. There will be always be more resale houses that come on the market, and there will be more new construction, so if you’re not sure of what you want to do, keep exploring.
Lastly, whichever route a buyer chooses, I remind them that it’s not set in stone. If you choose a new construction house and put a lot of thought into it, but then a few years later you decide you wish you did things differently, you can always sell it or turn it into a rental property. The same goes for a resale. As long as you don’t try to sell too soon and potentially lose money, your first home certainly doesn’t have to be your last.
