Buying vs Building a Home – Which Is the Best Option for You?


Trying to Decide Between Building vs Buying a Home?

That can be a tough choice. There is a lot to consider, so we made sure you don’t miss a thing and carefully weigh all the ups and downs.

Keep reading because we gathered the advantages and disadvantages of both options to help you decide which one is better for you.

Is Buying a New Home a Good Investment?

Depending on your needs, the investment in buying a new house can vary significantly.

We all have different priorities, so before you make your final choice take a look at some important advantages and disadvantages.

DID YOU KNOW: The number of new housing units sold in the US experienced a drastic fall of approximately 76% during the financial crisis between 2005 and 2011. In 2020, this number spiked to 820,000 which is the highest increase in recent years.

Benefits of Buying a New Home

Unlike building your house from scratch, buying one is usually more convenient and faster. It also comes with a set of advantages you may find difficult to pass on:

  • Neighborhood choice

When house hunting, one of the important aspects is the neighborhood the house is in. Depending on your budget, you can choose the area you like, close to work, and all the places that you visit on a daily basis.

If you have children, the proximity to a good school is also one of the big factors. On the other hand, when buying land, the area might still not be as well established.

  • The possibility of moving in fast

One of the advantages of buying a home vs building a home is that when you choose a house, take care of your loan, and manage other paperwork as the buyer, you can usually move in and start living in the house shortly after.

  • Less paperwork

Although buying a house comes with some paperwork, it’s still much less compared to the paperwork involved when building one. Having a good real estate agent and knowing how you can buy a house with bad credit, if that’s the case, will make the process even easier.

  • Comfort and saving money

An already built house can have some of the basic furniture, appliances, and landscaping that can be helpful to save you money in the beginning.

If you’re trying to compare the cost of building a house vs buying, it depends on a lot of factors. Sometimes, buying a home can be a more affordable option because a house loan usually comes with more favorable conditions than a land loan.

Also, if you’re paying rent, chances are you’ll have to keep up with that cost until your house is built and ready to move into.

DID YOU KNOW: The median purchase price for a new home in August 2021 in the US was approximately $390,900. However, the price may vary significantly depending on the region.

Disadvantages of Buying a New Home

Purchasing a home is a huge step and can be an excellent choice, but you have to make sure you have all the necessary information before buying a house.

Some disadvantages may make you reconsider. Here’s where building a house vs buying one falls short:

  • Chances are you’ll have to compromise

Looking for the right house can be exhausting and time-consuming. On top of that, be prepared that not all of the features are going to be aligned with your needs and desires.

To make your house shopping experience easier, make a list of the absolutely necessary things that the property has to have, and a separate list of nice-to-have things, and start from there.

When you find a house that checks all the boxes for the mandatory features and a few from the additional wish list, maybe it’s time to make an offer.

  • Possible bidding war

So, is it better to build or buy a house? One other thing you have to factor in is the stress. We sure hope it doesn’t come to that, but when you set your eyes on that perfect house, chances are you’re not the only one.

A bidding war can put the price bar for the property higher than you can afford, as well as consume a lot of energy and cause additional stress.

  • Toxic material and energy efficiency

If you decide to move into a house built years ago, you probably won’t have insights into the material used for construction. There could be asbestos, lead paint, and mold from over the years. All of this can be a potential health hazard that you’ll want to avoid at all costs.

These factors should also influence your choice of the property, and the decision of whether to build or buy a house. Bear in mind that older real estate can be built from not-so-safe and energy-efficient materials.

  • Maintenance and additional expenses

Older houses require more extensive maintenance and some things are bound to malfunction, maybe even sooner than you expect. Some repairs could also be required before moving in.

Also, considering that you probably won’t be the first to live in the house, maybe you just want to freshen up on the appliances or make an extra bathroom. If you’re still wondering, is it cheaper to build or buy a house, consider that some renovation may be needed to make you feel at home.

DID YOU KNOW: According to a Houzz & Home study, nearly 27% of the renovation projects in 2019 ended up costing from $10,000 to $24,999.

Key Takeaways

Buying a house can be a more convenient option because you’re able to move in faster.
An older property won’t be as energy-efficient as a new house, and the maintenance costs will probably be higher.
Building your own house will let you choose all the materials and adjust them to your needs.
When building a house, make sure to pay attention to the details in the contract to avoid budget and time overruns.

Benefits of Building Your Own Home

Creating your dream house, just the way you like it is particularly satisfying. But is it worth it?

According to some advantages of building your home, it just might be:

  • Choose everything to your liking

From the floor plan to the bathroom tiles and kitchen sink, everything is up to you. You can adjust it to your needs, considering your lifestyle.

  • Make it energy-efficient

Choose the materials wisely and make sure that all of the appliances and materials used are energy-efficient. This is very important, not only for protecting the environment, but you can also save a considerable amount of money in the future on energy bills alone.

  • Lower maintenance cost

Once your house is ready there should be some significant time before something needs to be repaired. You can enjoy your property at a lower risk of hefty breakdowns. Also, insurance rates are lower on a new property compared to the older ones.

DID YOU KNOW: Between 2015 and 2019, there were 3.46 million houses built in the US, according to Statista.

Things to Consider Before Building a House

Besides the cost of building a house, the construction process also requires a lot of time and energy so you must know what you’re getting yourself into.

Make sure to consider the location, market trends, and property taxes, as part of your decision-making process.

Some disadvantages may be more than you can manage, so here are some things to bear in mind:

  • The cost can rise quickly

Although you get a cost estimate upfront, there are always ways to increase the price along the way. This is something you should be aware of and talk about openly with your contractor to set certain limits.

  • It will take more time to move in

When weighing the pros and cons of building a house, make sure to consider all the aspects. Building a house and moving in can take anywhere from a few to many months, so make sure you set clear limits and a time frame with your contractor.

  • The decision making can be overwhelming

While building a house, you’re most likely going to be involved in every little detail, from the house plan and flooring to the color and size of the bathroom tiles. Make sure you have the time and the energy to go through this process.

DID YOU KNOW: According to the US Census Bureau, the average time needed to build a house in the US in 2020 is between six and seven months. The average for an owner-built house, however, is closer to 12 months.

Building vs Buying a Home: Conclusion

This is not an easy choice, but after reading this article, you’ll be all set to explore your options and choose the one that gives you greater value.

Whether you decide on the usually faster and more convenient option of buying a house or choose the adventure of building one, you now know what to consider.


Is it cheaper to buy land and build?

Not necessarily. Although the initial cost of buying the land doesn’t seem like much, with the construction preparation and the final touches, it might end up costing more than buying a new house. To keep the price lower, try to avoid any customized solutions and pricier finishing touches.

Is it a good idea to build a house in 2021?

It depends. The mortgage rates have been very low during 2020, and the trend seems to continue during 2021. On the other hand, the price of construction has gone up since the start of the pandemic so you’ll have to consider all the factors before making a choice.

Are building costs going down?

Some of them are. Lumber reached its highest point during 2021 but then decreased to a very low rate which is good news for housebuilders. However, bear in mind that this is not the only thing affecting the construction price and there should be more factors involved when deciding between building vs buying a home.


Alex is an IT wizz gone SEO gone fire-juggler. We’re not even joking. When he isn’t researching why one personal loan is better than the other and which piece of hardware you should buy next, he’s rollerblading or selling homes (because he does that, too, the smarty-pants).

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