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10 Reasons Buying a New Construction Home Is a Bad Idea Right Now (Don’t Overlook #9)

New isn’t always better when shopping for the home of your dreams.

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Updated Nov. 14, 2024
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Many Americans view buying a home as a savvy and smart homeowner move that can bring about financial stability in their lives. These folks may dream of owning a brand-new home, particularly given shortages in the housing supply and the expenses that can come with the upkeep of an older home.

But buying a brand-new home might not be the best idea. While a new home can offer a shiny new kitchen and pristine, unmarked walls, it can also bring headaches and extra costs.

Are you still interested in being the very first owner of your next home? Here’s what you need to know about buying a new construction home and why it might not be the best idea.

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The timeline can be long

successphoto/Adobe Estate agent talking to client

When you buy an existing home, you typically have a closing date. That is the day you take over control of the home.

But, if you buy a brand-new home, a closing date can be a moving target. You might face construction delays and permitting issues that regularly push back your move-in date.

And, if you are counting on selling your current home, you could end up in a pickle as you decide whether or not to risk listing your house.

Workmanship might be poor

Valmedia/Adobe Indoor damp & air quality testing

Often, people think about old homes as having unexpected cracks, breaks, and surprises. But new houses also might come with these drawbacks.

For example, if an inexperienced construction crew worked on your project or builders simply rushed to meet tight timelines, you might find poor workmanship throughout the house.

Cutting corners can translate to issues down the road, and you might not discover these problems until after you have moved in.

The cost might be higher

TanyaJoy/Adobe miniature house and money under a magnifying glass

When you buy a new house, you may end up paying more than you would for an older home. Part of the higher price is related to getting a shiny new home rather than something that needs work.

In addition, you are going to pay for upgrades, such as stone countertops or a spa-like bathroom.

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Your ability to negotiate might be limited

goodluz/Adobe Real estate agent inviting couple to house

When you make an offer on an existing home, you negotiate with a homeowner who may have built up equity over an extended period of time. They may have more wiggle room to come down on price, and can be motivated to sell sooner rather than later.

But, if you buy a new home from a builder, they have margins to hit, and there is less room to negotiate.

The landscaping might be less mature

adogslifephoto/Adobe green grass yard

Drive through a neighborhood of new homes, and you will probably see that most of the trees and shrubbery have been ripped out. That means new homeowners have to start from the ground up when it comes to landscaping.

You can do it yourself, or you can pay a service a few thousand dollars to bring in grass and shrubs.

Taxes might be higher

Vitalii Vodolazskyi/Adobe property tax document on table

Taxes are often higher in newer neighborhoods for two reasons.

First, there is the infrastructure required to create a new development, including roads and electrical grids. These costs are reflected in the taxes paid by residents.

In addition, property taxes are often higher on new homes.

There is the risk of off-gassing

Andrey Popov/Adobe Magnifying Glass Over House

New homes have a specific smell that lets you know the place is shiny and new. But that odor isn’t necessarily a good sign.

Sometimes, the smell comes from the off-gassing of volatile organic compounds (VOCs) from flooring, paint, carpet, and cabinetry. These can negatively impact health.

The HOA might be strict

Andrey Popov/Adobe house model near HOA rules and regulations

New communities often have homeowners associations (HOAs) that enforce rules and try to maintain consistency throughout the neighborhood. These rules are often strict.

HOAs are not always popular with residents, but buying a brand-new home might mean accepting its restrictions.

There might be hidden costs

nopparat/Adobe Woman holding house model

Buying a new home can come with multiple hidden costs that aren’t reflected in the purchase price.

This might include additional fees due to taxes and HOA expenses, costly finish and fixture upgrades, and expenses related to delays. These costs can add up quickly.

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The neighborhood might not be finished

ungvar/Adobe New housing development being built

If you are among the first to move into your neighborhood, you can expect to be surrounded by empty houses that are under construction for many months, or even years.

This can bring with it dust and noise, as well as an eerie feeling that there is no one around.

Bottom line

ImageFlow/Adobe houses for sale

Buying a home is still regarded as one of the safest ways to get ahead financially. However, you have to go into the transaction with clear eyes and a full understanding of the expenses involved.

So, talk to a real estate professional to make sure you fully understand the implications before you make an offer on that shiny new home on the hill.

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Author Details

Heather Bien

Heather Bien is a writer covering personal finance and budgeting and how those relate to life, travel, entertaining, and more. With bylines that include The Spruce, Apartment Therapy, and mindbodygreen, she's covered everything from tax tips for freelancers to budgeting hacks to how to get the highest ROI out of your home renovations.