Buyers looking for existing homes are combatting inflated home prices, elevated borrowing costs, and a decades-old housing shortage, but in some locations, new-home construction may actually be a more affordable alternative. A recent study by StorageCafe found that building was actually cheaper than buying in 18 states in 2022, but total costs depend on location, house size, and a number of other factors.
Building in California was found to save over $200,000, according to the study, and in Colorado, homebuyers could save more than $100,000 by starting from scratch. Hawaii topped the list of locations with the greatest cost savings. While the average island home costs around $1 million to buy, average building costs fluctuate around roughly $550,000, The New York Times reports.
Building was found to be cheaper than buying in 18 states. In Hawaii, the median-priced house was listed at $1,045,000, but the study found that building would cost only $551,000, about $494,000 less, the greatest savings discovered.
In 28 of the states studied, building wasn’t worth it.
Advertisement
Related Stories
Housing Markets
States Seek Long-Term Solutions to Reform Property Taxes
Rising home prices typically lead to higher property tax assessments, which has been the case in many Mountain West states, prompting lawmakers to grapple with property tax relief
Housing Markets
Metros Where Housing Prices Have Doubled in Less Than 10 Years
Historical data show it's taken less than 10 years for home prices to double in 68 of the country’s 100 largest cities
Affordability
The Disappearing Act That Is Middle-Income Housing
An expert weighs in on the diminishing supply of middle-income housing, which is particularly acute in California, and what to do about it