When shopping for a home, there's no one-size-fits-all approach. Personal preference is everything, and what suits one buyer or family might be unacceptable for another. Cost, size, location, maintenance, and character are just a few of the many factors that homebuyers care about, and though each house is unique, when it comes to comparing new homes and older homes, certain qualities are true across the board. Understanding the general differences can help focus your search early in the process.
Here are advantages and disadvantages to consider when trying to determine whether you should buy a newer home or an older home.
- There’s no clear relationship between the age of a home and its price.
- Older homes often have larger lots but less storage space, and they’re more likely to need repairs.
- Newer homes tend to be larger but have smaller lots, and they’re more likely to be energy-efficient and built to code.
Trends in Homebuilding
It used to be that new homes or model homes cost more than older homes, but that's not always the case. Location plays a big role, as real estate in urban areas typically costs more than it does in the suburbs. Inner-city single-family homes in desirable neighborhoods are likely to have been built before homes in the suburbs, and on average they cost more than entry-level new homes being developed in new subdivisions outside the city.
As the cost of land has increased over time, the size of new home lots has shrunk, yet houses are getting larger, leading to smaller yards and closer neighbors. Townhomes and condos are on the rise, as standalone single-family residences decline.
From 1975 to 2019, the average size of a single-family home in the U.S. has nearly doubled. Since 2019, square footage of newly constructed homes has dipped slightly, but economists attribute this to temporary recession activity.
Houses are also being built differently from how they were decades ago. Building codes may be more strict, but construction practices have been streamlined. Today's construction is often cheaper, because, for instance, it's less expensive to use 2x4 pine framing or engineered wood over 2x6 redwood, and to use drywall instead of plaster.
Advantages to Buying an Older Home
- Old-World Construction: Older homes have stood for decades, some for centuries, and have weathered many storms. Some were built by hand by genuine craftsmen with meticulous attention to detail. The old adage, "They don't make 'em like they used to," rings true.
- Larger Yards: When land was cheaper, builders built on larger lots, leaving room to accommodate garages on alleyways, and bigger side-, front-, and backyards.
- Established Neighborhoods: Zoning changes are unlikely to occur in older areas, so older homes come with more predictable surroundings. Older neighborhoods might even be deemed historic, with a high value on preservation.
- Mature Trees and Vegetation: On older properties, it's not uncommon to see 50- to 100-year-old trees providing canopies in yards and boulevards, or rose bushes tended to for generations.
- Centrally Located: Older residential areas are usually closer to city centers, so residents can walk to local coffeehouses, antique stores, and restaurants.
Buyers looking for architectural character will find a wealth of options in older homes.
- Architectural Character: Craftsman bungalows originated in California in the 1890s, but now they're ubiquitous across the U.S. Other popular styles are Victorians, Greek Revivals, Tudors, and Colonials. Stained-glass windows, custom arches, hand-carved detailing, and other interesting architectural features are abundant in older homes.
Drawbacks to Buying an Older Home
- More Maintenance: Aging construction means there's always something to fix. Chimneys and stone foundations require tuckpointing. Floors may slope.
- Plumbing Failures: Older homes used galvanized pipes, which, unlike modern copper pipes, are rust-prone, and over time will break down. Expanding tree roots also break up pipes. For homes built before sewer systems, cesspools can overflow.
- Electrical Safety: Many older homes weren't built to comply with modern safety standards. Sensitive electronics require grounded wiring, and Romex (a type of non-metallic sheathed cable) can't be mixed with knob and tube. Aluminum is often dangerous.
- Smaller Spaces: Before today's concept of "bigger is better," people had less clothing, fewer personal items, and rarely more than one vehicle. As a result, closets, cabinets, garages, and other storage spaces tended to be on the smaller side.
- Appliance Updates: Apart from HVAC systems, functional or trendy updates can involve pricey kitchen and bath remodeling.
- More Expensive: You'll pay a premium for an urban location and also for the charm that comes with classic and vintage homes.
- Less Square Footage: With the exception of estates, many older homes are smaller in size, despite larger family sizes when they were built. Times change.
Advantages to Buying a Newer Home
- Less Maintenance: New construction is meant to outlast warranties, so homeowners shouldn't expect to install a new roof, replace the water heater, or repair fixtures for 10 to 20 years.
- Modern Conveniences: Many creature comforts come standard nowadays, such as built-in dishwashers, refrigerators, microwaves, and wine coolers. Newer homes frequently feature master suite baths, workout and media rooms, and networked wiring systems.
- Energy Efficiency: New appliances use less energy. Walls, ceilings, and floors of newer homes are insulated. Dual-pane windows retain more heat in winter and keep the home cooler in summer. Many newer homes are even built with solar panels.
- Built to Code: Municipal permitting systems are well established, and building codes are updated all the time. New construction can't even get approved without conforming to current building codes and safety regulations.
- More Affordable: If the new home is not custom, it's likely to cost much less per square foot than an older home in the same location.
- Greater Average Square Footage: It's typical to see two-bedroom homes with 1,000 square feet sell for the same as a two-story, 2,500-square-foot home in the suburbs.
New homeowners often protect their investment with a home warranty. In essence, home warranties are contracts to ensure discounted repairs in the future, but they also act to incentivize builders and contractors to do quality work when installing systems in new homes.
Drawbacks to Buying a Newer Home
- Cookie-Cutter Floor Plans: It's a matter of preference, but some say that tract homes are identical to one another and lack individuality.
- Immature Vegetation: It can take years for trees to grow, so newer homes often utilize shrubs, cacti, or other quick-fix landscapes.
- Unpredictable House Settling: All houses settle into their foundations after a while—it happens everywhere, regardless of soil—but older houses have already done so. When buying a new house, you should prepare for shifting. Settling can cause cracks in foundations, walls, and door frames.
- Longer Commutes: Newer houses are overwhelmingly built in the suburbs. If you want to be where the action is in a metropolitan downtown area, or avoid the drive to work in rush-hour city traffic, the distance from downtown might make a difference to you.