The Great Debate: Buying a New Build vs Renovating a Starter Home

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About the Author: David Perrotti

Dave has over 20 years of experience in the construction industry, is a Bestselling Home Improvement Author on Amazon, and constantly seeks to reinvent the remodeling industry. As a veteran of the Army and Air Force, Dave operates his business, Fine Home Contracting, on the core army values of loyalty, duty, respect, selfless service, honor, integrity, and personal courage.
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Buying a home is an exciting milestone in life, but also a big decision. One of the largest decisions to make as a prospective homeowner is between purchasing a newly constructed home versus buying an older home and renovating it. While there are appealing factors to both routes, there are also unique pros and cons to each approach to homeownership. Here is an in-depth look at the pros and cons of new builds versus renovated homes to help you determine the best fit for your family.

The Appeal of a New Build Home

Brand new construction offers many attractive benefits that homebuyers should consider.

Financing Options for New Builds

If you decide to build new construction, there are two main financing options to consider.

The Appeal of Renovating a Starter Home

While new construction has perks, upgrading an existing house is also an excellent option. Here are some key benefits of home renovations.

Financing Options for Home Renovations

Renovating or upgrading a home also has specific financing options worth exploring.

Interest Rates for New Builds vs Renovations

When evaluating new construction versus renovated homes, interest rates are possibly the largest factor to consider.

30 Year Fixed

(August 2023)

Interest Rate:

6.875% Interest

7.18% APR

20 Year Fixed

(August 2023)

Interest Rate:

6.75% Interest

7.162% APR

FHA 203(k)

(August 2023)

Interest Rate:

6.875% Interest

7.786% APR

(Statistics from Rocket Mortgage)

Deciding Between New vs Renovated

With the pros, cons, and financing options covered, here are final tips on deciding between new builds or renovated homes.

Determining whether to buy new construction or renovate an existing home comes down to personal preference and lifestyle. For hands-on homeowners who don’t mind delayed gratification, renovating a starter home can be a fulfilling experience and solid investment. If you value convenience and modern amenities, choosing a brand new custom built home may be perfect for you. Carefully weigh all the variables before deciding which route fits your needs and budget best!

FAQ

How do mortgage rates compare for new vs. existing homes?2023-08-01T15:08:50+00:00

Current mortgage rates are very similar for both new construction and existing homes, averaging around 7% for 30-year fixed rate loans as of August 2023. Shop multiple lenders for the best deals.

What financing options work for home renovations?2023-08-01T15:08:32+00:00

Home renovation financing options include cash-out refinances if you have enough home equity, HELOCs for flexibility, and FHA 203(k) renovation loans that combine purchase and upgrades.

What financing options are available for new home construction?2023-08-01T15:08:10+00:00

Financing options for new builds include conventional mortgages and construction loans. Construction loans cover the full building phase and convert to permanent mortgages.

What are the pros of renovating an existing home?2023-08-01T15:07:56+00:00

Pros of renovating a home include cost savings on purchase price, a choice of established neighborhoods, vintage architectural details, and lower cost with DIY renovations.

What are the cons of buying a new build?2023-08-01T15:07:24+00:00

Cons of new construction include higher cost, potentially limited inventory, unknown neighborhood over time, and possible construction delays. Brand new homes also lack the character of older homes.

About the Author: David Perrotti

Dave has over 20 years of experience in the construction industry, is a Bestselling Home Improvement Author on Amazon, and constantly seeks to reinvent the remodeling industry. As a veteran of the Army and Air Force, Dave operates his business, Fine Home Contracting, on the core army values of loyalty, duty, respect, selfless service, honor, integrity, and personal courage.

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