Public health and the economy have faced monumental challenges in 2020, but a few silver linings have emerged. For example, it’s an excellent time to buy a new home.
Quite a few home builders were able to continue their work during Wisconsin’s safer-at-home order, so there’s a healthy number of brand-new properties in the housing market. Plus, there are plenty of ways to keep yourself healthy while viewing homes and completing your purchase. Many builders and real estate agents host virtual showings, and some mortgage lenders offer contact-free ways to discuss borrowing options and sign paperwork.
Here are more reasons to consider a brand-new home right now.
Low Interest Rates May Lead to Significant Cost Savings
Mortgage interest rates dropped earlier this year, creating attractive opportunities for buyers. Even a small decline can mean big savings. For example, borrowing $250,000 at a rate of 3.25 percent instead of 3.5 percent can save you more than $12,000 over the course of 30 years.
“That might be enough money to remodel a bathroom or do some nice landscaping,” says Julio Rios, vice president of mortgage lending at UW Credit Union. “It’s also enough to pay for a year of in-state tuition at UW–Madison or possibly a used car.”
You Can Customize to Your Heart’s Content
Choosing new construction often means choosing fixtures, finishes, and other details that reflect your tastes and lifestyle. If you’re planning a home theater or a music studio, you might soundproof the walls. If cooking is your love language, you might upgrade the stove to a six-burner model. The possibilities are endless.
In many cases, you can also decide how many bedrooms and bathrooms your new house will have. Sometimes you can even determine their location or layout. This increases the chances that the home will meet your needs. In other words, you probably won’t need to remodel much in the near future.
Your Home Will Meet the Latest Safety Standards
Building codes and other safety standards evolve over time, as do construction best practices. When you buy a brand-new home, you’re likely to benefit from modern construction methods, materials, and knowledge. This means safe and modern pipes, lead-free paint, fewer fire hazards, and other benefits.
You’re Likely to Conserve Energy
Saving energy can shrink your carbon footprint and your utility bills. That’s because builders are designing homes in greener ways than ever before. This includes using south-facing windows to collect heat and storing that energy in heat-retaining brick or stone, as well as incorporating water-conserving fixtures and high-efficiency appliances.
According to the U.S. Energy Information Administration, new homes are an average of 30 percent larger than older ones, and they use about the same amount of energy overall. Likewise, a home built today will typically use less energy than a similar home built just five years earlier. That’s because the International Energy Conservation Code, which sets the baseline for energy efficiency in homes and businesses, gets revised every few years. With each update, new construction is required to conserve more energy.
You’ll Probably Need Fewer Repairs
No matter how charming an older home may be, time takes its toll. Wear and tear make repairs necessary, even if the previous owners took good care of the property. Within a few years of moving into an older home, you’ll likely need to address worn flooring, a failing furnace, or an aging roof. These fixes can be both expensive and time consuming. While a new home will eventually need repairs, it’s less likely to need as many in the short term.
Builders Often Provide Home Warranties
While new homes tend to require fewer repairs than older ones, they aren’t maintenance free. A home warranty covers certain types of repairs for a specified period of time. Your builder is likely to offer a warranty for your first year in the home, possibly longer, and it may cover pricey problems, such as roof leaks and water heater breakdowns.
“Read the warranty carefully,” says Rios. “Buying a home is a major purchase, so it’s important to know exactly what you’re getting.”
Jessica Steinhoff is a financial education writer with UW Credit Union, which offers mortgages, credit consultations, and other services for homebuyers. For details, see uwcu.org/loans/home-loans .
UW Credit Union
3500 University Avenue
Madison, WI 53705