Pros and cons: If you buy or build a house in 2022, preferential price (2023)

We all imagine the home of our dreams. Three floors with panoramic mountain views. A spacious apartment in the middle of a vibrant city. Wraparound porches with a neighborhood vibe.

When it comes time to invest in their dream home, many buyers ask the same question: should I build a home or buy one?

The decision to build or buy a home in 2022 certainly comes with challenges. Rising mortgage rates and inflation make it difficult to forecast the housing market. In addition, the pandemic has created a shortage of supplies, materials, inputs and even labor.

And the financing?Get a pre-approved mortgageit's the best first step, whether you're buying a house, land or starting construction.

Financing a mortgage to build your dream home in 2022 can seem daunting compared to buying a home for sale. But building a home has benefits that can make the extra effort worth it.

If you decide to build or buy a home in 2022, these considerations can help you cross the finish line.

Benefits of building a house in 2022

1. Avoid the bidding war and competition in the real estate market.

Okay, let's face it - you could end up in a bidding war for the best contractors in the business. But if you decide to build a house, you can set the schedule and plan the construction according to your lifestyle. You don't have to worry about losing a bid or bidding on the perfect house only to have it slip away.

If apartment prices in your desired location are skyrocketing, you can rest easy. Whether or not the real estate market changes, you don't have to worry about the competition.The house of your dreams may already be under construction and with guaranteed financing.

Take the first step towards your best mortgage.

Personalized home loans are just the beginning.

(Video) Should you Buy a house ? Rent vs Buying a house in 2022

View all credit options

2. Build a custom home that fits your lifestyle.

This goes without saying, but it's worth noting. If you're buying a house in 2022, there may be fifty things you want to change about the house once the fund closes. Updates and changes require more funding and more decisions.

When building your own home, you can design every detail yourself. Brave the night sky in the master bedroom, two fireplaces in the living room, or build a full-featured home office.

You can build a home in 2022 that fits your lifestyle, your job, your family and your future. It's also a smart moveGet financing approved earlyto move things forward.

Speak to a Mortgage Adviser Nowif you are planning to build a custom home. An experienced mortgage adviser can quickly start the process and help you secure the lowest possible interest rate. Plus, they uncover hidden opportunities and customize mortgage financing to meet your immediate and long-term financial goals.

Use This Mortgage Calculator To See How Much You Can Pay

Start your application in less than 5 minutes.

fang hier an

(Video) Pros and Cons of buying a NEW CONSTRUCTION home in Denver Colorado !

Disadvantages of building a house in 2022

1. Expect delays and additional costs, especially in 2022.

The decision to build a home can be unpredictable along the way. It is normal to expect delays in construction or delivery. The downside is that you may have to rent for longer than expected or temporarily live in an inconvenient location.

Likewise, you may encounter challenges with contractors or vendors. Be prepared for delays and be flexible here too. There will be times when you will need to work as a project manager, and sometimes it helps to stay adaptable.

Be prepared for bottlenecks and change orders due to current supply shortages across industries.

In 2022, there is still a lot of logistics out of control – delays in shipping, distribution and deliveries, manufacturing and production. Almost no sector has not been affected by the pandemic.

Find a Qualified Local Mortgage Consultant

2. Estimating the cost of building your dream home can be difficult.

You can look up the average construction cost by zip code across the country, as most new construction is priced by the square foot. However, the finish and details vary greatly, so keep the following in mind:

  • General Construction (average price per square meter)
  • Lot/Land - Market price for the area
  • Level/clear the ground
  • Stiftung
  • framework
  • Plumbing, air conditioning, electrical
  • Exterior – windows, sunroom, garage
  • Interior – bathroom/kitchen, floors, cabinets, appliances
  • Landscaping - soft landscaping, plants, patio, pool, kitchen
  • Plants - Design and Architecture
  • building permit

The cost varies greatly depending on style, material quality and preferences. Labor costs can also vary wildly depending on who you hire.

3. Change orders can lead to a cost explosion.

Even with existing contracts, costs can spiral out of control if you're not careful. New materials, change orders, and requests for updates can quickly add to costs. Along the way, you'll have to make hundreds of decisions, from architecture to design elements to textiles and finishes.

Try to work through the entire project in advance and be as detailed as possible.

For example, if you replace the kitchen cabinets or the flooring in between, the cost can increase dramatically.

Be careful not to go over approved funding or go too far on a project that is over budget and schedule.

Pros and Cons: Buying a Home in 2022

PRO: Buying a home is a simple process.

Buying a house in 2022 is much easier than building one. Costs and fees vary by area, howeverFast mortgage pre-approval can help you stay competitive🇧🇷 High-cost areas are still very competitive, so be patient in your research and talk to your agent about the best strategies.

Acquisition costs are pretty standard. andpre-approve a mortgageit can relieve stress so you don't have to worry about financial failure. In general, the initial costs of buying a home are predictable:

(Video) Warren Buffett: Why Real Estate Is a LOUSY Investment?

  • a lot of money down
  • Initial payment
  • Mortgage points (if applicable)
  • property taxes
  • Private mortgage insurance (with down payment < 20%)
  • homeowners insurance
  • Closing costs (loan fees, mortgage points, appraisal, title insurance)

RELATED: Talk to a Local Mortgage Specialist to Get Your Best Pre-Approved Mortgage

PRO: The moving schedule is predictable when you buy a home.

As a rule, the trust closes within 30 to 45 days with a new home. This often means new homeowners can move into a new home in as little as 60 days from the day the offer was accepted.

Planning a move to a new location can be a lot of work, but it's a race to the finish line.

RELATED: Discover the Truth About No Closing Cost Loans

Thinking of refinancing?

Plan your next paycheck and start saving.

Calculate my new mortgage payment

CONS: Immediate repairs or maintenance may be required.

The professional home inspection may have alerted you to several projects that need to be completed once you are the new homeowner. You may need to consider the cost of repairs, maintenance or upgrades that are needed immediately. The home may have structural damage or simply have design elements that you don't like.


DISADVANTAGE: Outdated electrical, plumbing, or HVAC systems may need updating.

When you buy a home, it may have outdated electrical or plumbing fixtures. Insurance rates will likely be higher for an older home, especially if it is not energy efficient.

Once you start making updates, contractors may discover older details that need to be tweaked to code. This can lead to additional costs and work that you weren't expecting.

RELATED: The Top 7 Ways to Increase Your Home's Value in 2022

Helpful advice from friendly mortgage experts.

Take the first step towards your best mortgage.

Put me through a consultant

Next steps

If you decide to build or buy a home in 2022, take the time to weigh the pros and cons of the current economy. Think about your lifestyle, how you prepare for the unexpected, and what type of mortgage you want.Get in touch with a local mortgage adviserto discuss your goals. The right home loan can help you build financial security and save money on your mortgage. We are happy to help.


Is it more expensive to buy or build a house in 2022? ›

But building a house is still more expensive than buying one. Existing home prices are 15% higher in 2022 than last year. But building material costs have gone up 19%. And thanks to inflation, builders are also paying more for other things they need to build houses, like workers, fuel and marketing.

Is it worth it to build a house in 2022? ›

Yes 2022 can still be a good time to build your custom forever home, despite rising costs and interest rates. Building your custom home is an investment in your family's lifestyle and should be looked at as a long term financial & lifestyle decision of living in your forever home for 5 or more years.

Should I build a house now or wait until 2023? ›

Interest rates and overall building costs are not forecasted to decrease into 2023, and could even continue rising. The market is volatile and world events are unpredictable, so it is likely that building sooner could save you money in the long run.

Is it more expensive to buy or build a house? ›

In general, buying an existing home is cheaper. According to the National Association of Home Builders and the U.S. Census Bureau the median cost to buy a house today is $410,600 which is $28,800 less than building one.

Will construction costs go down in 2023? ›

In 2023, the construction industry is expected to shrink by 7%. “This contraction is worse than the previous estimate of 4.3%, because growth is being hampered by high input costs, rising interest rates, inflation, and supply chain issues," said Patrick Ryan, executive vice president for the Americas at Linesight.

Will construction costs go down in 2022? ›

Like many sectors, the construction industry will not go unscathed. 2022 has seen a continual rise in construction material costs and the most recent Building Materials & Components Index reported a 16.7% increase for “All Work” for September 2022 year on year.

Is it cheaper to buy or build 2022? ›

Is it cheaper to build or buy a house? As a rule of thumb, it's cheaper to buy a house than to build one. Building a new home costs $34,000 more, on average, than purchasing an existing home. The median cost of new construction was $449,000 in May 2022.

What are the disadvantages of buying a new build home? ›

The cons of buying a new build

Premium price – Developers price new build properties at a premium, you will pay for the fact that everything is brand new. This means that new builds can lose their value more quickly than old houses, so when you come to sell, you may find that your house has depreciated in value.

What are among the disadvantages of building your own home? ›

Costs Of Building A New Home

New major appliances: You won't have older appliances to live with for now. Instead, you'll have to purchase new appliances when you move in. Permits and utilities: It can be expensive to add connections for basic utilities. Plus, the permitting process for new builds can be expensive.

Do construction costs go down in a recession? ›

Home renovations will typically be more affordable during a recession. While material prices rise, contractors generally charge less for your home remodel during lean economic times.

Is it a good time to build a house or should I wait? ›

If you've been considering building a home but haven't yet made the leap, 2023 might be the time to do it. The housing market will have stabilized, helping new projects to hold their value. The lumber market has also stabilized, meaning the cost of materials and construction will be more steady.

What is the lifespan of a new build house? ›

This is largely debated within the construction industry as it is really dependant on the materials that are used, the quality of the workmanship and the maintenance that is required and followed through on. On average, the generally expected and acceptable lifespan of a home should last at least 60 years.

What is the cheapest style house to build? ›

Ranch Homes

A home with a simple and concise layout is the cheapest type of house to build. Ranch homes are typically single-story structures with attached garages. They're easy to find construction plans for and highly customizable, so you can find a home that fits your needs and budget.

Can building be cheaper than buying? ›

The Golden State is the second-most cost-effective state for home building in the United States, trailing only Hawaii. Yardi's data estimates that it could be more than $200,000 cheaper to build a home from the ground up, rather than purchase one that's already standing.

What is the cheapest way to build a house? ›

The cheapest way to build a home is to design a simple box. Sticking to a square or rectangular floor plan makes the building and design simple. Generally speaking, building up is cheaper than building a sprawling one-story home, so you may want to consider planning for a multiple-story home if you need more space.

Will building materials be cheaper in 2023? ›

The coming year will probably bring selective reductions in materials costs and supply chain bottlenecks, Simonson said, but despite some easing for builders, he still expects that construction input costs are likely to continue rising more than overall consumer prices.

What is the residential construction outlook for 2023? ›

The potential for recession, continued inflation, critical labor shortages and supply chain issues will loom large over construction in 2023. Additionally, many eyes are on interest rates in a virtual wait-and-see mode as to whether they will continue to rise, and by how much.

What is the projected inflation for construction? ›

Annual averages should be used to report inflation.

The average for 2022, when compared to the average for 2021, is up 12.7%. Several major cost components have been on decline the last few months: Lumber/Plywood, Steel Mill Products, Fabricated Steel, Steel Pipe and Tube, Aluminum and Diesel Fuel.

How much have build costs increased in 2022? ›

Building materials prices were 25% higher in 2022 than they were in 2021, new government figures show. The price rise will come as no surprise to those in the building trade, who have seen firsthand the effects of high building demand amid labour and construction material shortages.

Will construction costs go up in 2023? ›

The National Association of Home Builders (NAHB) reports that while housing costs have risen over the last ten years, cost increases should return to the national average of between 2 and 4 % in 2023.

What will happen to construction in 2022? ›

LaborIQ predicts a 3.9% growth in construction jobs in 2022 and also predicts a commensurate 3.9% median wage growth in construction jobs and, in some metropolitan regions, even wage growth of over 4.5%.

Should I buy a house now or wait for recession? ›

Lower Home Prices – There are fewer homebuyers during a recession. This low demand from the buy-side will cause home prices to fall. Therefore, you can typically get a better price on a home when buying during a recession. Less Competition – Fewer homebuyers means less competition and a more relaxed homebuying process.

Are building material prices going up in 2022? ›

Material Prices

A recent report by the Bureau of Labor Statistics states that prices for construction materials increased by around 25% in 2021, which is a trend that has continued into 2022.

Do new build houses lose value? ›

Do new builds lose value? New build values can depreciate in the short term, simply because they are no longer 'new'. So, if you're only planning to stay in your property for a short period time, a new build may not be right for you as an investment.

Are new build prices negotiable? ›

"So, if you're in the market for a new-build, always be prepared to negotiate with the developer. The chances are that their asking prices are set at a level they are happy to reduce slightly for a quality buyer in a proceedable position who is bold enough to ask for a discount.

Why avoid new builds? ›

Space – Some developers pack a lot of properties onto a site in order to maximise their profits. This can mean a new-build home is less spacious than an older property. We know from experience this can particularly affect storage space and the size of the rooms.

What are the risks of building a house? ›

Common risks include:
  • Safety hazards that lead to worker accidents and injuries.
  • Managing change orders.
  • Incomplete drawings and poorly defined scope.
  • Unknown site conditions.
  • Poorly written contracts.
  • Unexpected increases in material costs.
  • Labor shortages.
  • Damage or theft to equipment and tools.
Jun 4, 2020

What are the three advantages of building a house? ›

Read on to discover some of the many advantages of building your own home which may just convince you that building is the right move for you.
  • It's Built with You in Mind. ...
  • You Can Take Advantage of Stamp Duty Savings. ...
  • There's Less Maintenance. ...
  • You Can Be Sure of the Quality. ...
  • You Can Make It Energy Efficient.
Nov 23, 2020

What are the problems in building a house? ›

Top 5 Challenges Faced While Constructing a Home
  • Finding the right builder.
  • Creating a green home! Yes, or no?
  • Budget.
  • Permitting and documentation.
  • Setting and sticking to a construction timeline.
Feb 5, 2021

Is a recession a bad time to build a house? ›

Building a new home can become a stressful experience, even at the best of times. But when you throw a recession into the mix, there arises the possibility that the wrong building company may not even be strong enough to survive.

Does construction take a hit during recession? ›

The construction industry always is adversely affected during recessionary periods in the U.S. economy. During the Great Recession (December 2007 – June 2009), the U.S. construction industry saw nearly 2.5 million layoffs and the demise of nearly 150,000 construction companies.

Will 2023 be a good year to buy a house? ›

Redfin deputy chief economist Taylor Marr expects about 16% fewer existing home sales in 2023 vs 2022. Marr believes potential buyers are still grappling with affordability, high mortgage rates, high home prices, inflation, and a potential recession. “People will only move if they need to,” Marr says.

Will inflation cause a housing crash? ›

According to a Statista report, house values across all 50 states and D.C. rose from 2020 to 2021. The same study saw the average appreciation for single-family homes in multiple states spike to more than 27 percent in a single year. However, as high inflation costs press down on buyers, it could depress home values.

What are the best months to build a house? ›

The cheapest time to build a house is often in the fall and winter months. Due to lower demand for products and services, construction costs and building materials are quite low at this time of year. Beginning construction in the fall or winter, when lumber prices are lower, can save you a lot of money in the long run.

Are new build houses well insulated? ›

The internal wall insulation is also superior in new builds because these homes have well insulated cavity walls. This is done by insulating the cavity space between the outside and inside wall, adding an extra layer to keep the cold out and the heat in.

Are new builds more expensive than old houses? ›

You usually pay a premium for a new build, similar properties in the area that are older typically are less expensive and more in line with the local area.

When should I build my house? ›

What is the best time to start home construction? While spring is an excellent season to begin construction, the fall and winter months are often when building supplies and construction costs are lowest due to lower demand.

Are open floor plans cheaper to build? ›

Are open floor plans cheaper to build? Because the lack of weight-bearing partition walls requires heavy-duty beams in their place, the materials costs involved in building open floor plan homes generally makes them more costly.

What is the cheapest state to build a house in? ›

Rounded up below is a list of the top five least expensive states to build a home this year, based on the study.
  • #1 Oklahoma. Boomer and Sooner fans are in luck when it comes to the study's results revealing Oklahoma as the cheapest state to build a home. ...
  • #2 Mississippi. ...
  • #3 Nebraska. ...
  • #4 Arkansas.
Feb 1, 2022

Is it cheaper to Build a square or rectangular house? ›

Generally, square-shaped homes are more economical to build than rectangular-shaped homes.

Can you negotiate price when building a home? ›

You can negotiate price, lot lines, loan fees and other items,” Stokes says. “A builder may initially say no, but keep pressing. If you don't ask, you don't know the answer.” Hiring a real estate agent who specializes in new construction can give you extra confidence in negotiating with builders.

What's the most expensive part of building a home? ›

The Foundation

Pouring a foundation is expensive; often it is one of the most expensive parts of building a home, usually over most of the items on this list. A larger home's foundation will be more expensive to pour. The type of foundation and the climate you're building in will also matter.

How much money should you save before building a house? ›

The bank usually wants you to make a down payment of 20% of either: the cost to build. or. the appraised value.

Will it be cheaper to buy a house in 2022? ›

But many experts note that, given the ongoing shortage of properties, home prices will still continue to go up in 2022 -- just at a slower pace. Plus, prospective new homeowners have to contend with relatively high mortgage rates, which keep monthly mortgage payments expensive.

How much have building costs increased 2022? ›

The annual rate of construction output price growth was 9.6% in the 12 months to June 2022; this was the strongest annual rate of price growth since records began in 2014.

How to save money building a house in 2022? ›

How to Save Money When Building a House
  1. Consider the Location. ...
  2. Custom Built. ...
  3. Designing Your Home on a Budget. ...
  4. Style of Home. ...
  5. Get Design Plans Approved. ...
  6. Make a Budget. ...
  7. Choosing Affordable Materials. ...
  8. Building Your Home on a Budget.
Jun 14, 2022

Is a recession a good time to build a house? ›

All in all, though, building a new home during a recession is far from a bargain. The risks of getting a builder down on his luck, the cost of raw materials, and the chance of a home not appraising for what it costs to build are high.

Is 2022 a good time to build? ›

Barring any unforeseen calamities, 2022 could be a good year for homebuilders and buyers. However, the effects of inflation, new COVID variants, or other market disruptions could change everything. As always… caveat emptor.

Is it the best time to buy a house 2022? ›

As 2022 begins to wrap up, borrowers looking to buy a home may find it's their best opportunity of the year. Mortgage rates have climbed overall, but home buying conditions generally ease up in fall and winter as demand fades and sellers become more flexible.

Do construction prices go down in a recession? ›

If a recession does hit, the cost of land could fall and construction costs could drop, too—as good a time as any to get building, Egan said.

Will construction costs go down in the future? ›

According to the CBRE and National Association of Homebuilders (NAHB), construction cost increases will return to the historical average of 2% and 4% in 2023. It is also expected that inflation will begin to taper by the beginning of next year and return to near-normal levels by June 2023.

Will lumber prices go down in 2023? ›

Prediction 2: Lumber demand will drop again 2023

This follows consumption dropping by an estimated 1.6% (0.8 BBF) in 2022, which was driven by a sudden weakening in new residential construction activity in the second half of the year and a major correction in do-it-yourself (DIY) lumber demand.

Is it better to buy or build in 2022? ›

Is it cheaper to build or buy a house? As a rule of thumb, it's cheaper to buy a house than to build one. Building a new home costs $34,000 more, on average, than purchasing an existing home. The median cost of new construction was $449,000 in May 2022.

What is the most expensive part of building a house? ›

Framing. Perhaps the most expensive part when it comes to building a home is the framing, which consists of wooden beams that make up the home's skeleton. Forbes states that high-quality lumber averages about $33,000 for a home in the United States. Metal stud framing systems begin around $20,000.

What is the least expensive way to build a house? ›

The cheapest way to build a home is to design a simple box. Sticking to a square or rectangular floor plan makes the building and design simple. Generally speaking, building up is cheaper than building a sprawling one-story home, so you may want to consider planning for a multiple-story home if you need more space.

What do builders do during a recession? ›

Contractors would likely respond to a downturn by trimming their least productive personnel but would strive to keep their most talented team members. A recession would weaken the labor market, rendering workers more concerned by job security. Under those circumstances, they could accept lower compensation increases.

Is 2023 a good year to buy a house? ›

Mortgage rates have skyrocketed, and the market has taken a beating. But don't expect 2023 to turn into a buyer's market just yet, housing experts say. Home sales have plummeted across the board, with sales of existing homes dropping for 10 months in a row, a new record. And home-price growth has stalled.

Will lumber prices drop in a recession? ›

But what about the long-term? The last significant recession began in 2008, dramatically affecting the real estate and mortgage industries. During that time, lumber prices dropped as low as $200 per thousand board feet (adjusted for price index increases and inflation over the last 13 years).


1. Pros and Cons Higher Floor vs Lower Floor living – Which is better | Which Floor is Better
(How to make my house)
2. Food Sticking to Stainless Steel Pans? 4 Common Mistakes to Avoid
(Prudent Reviews)
3. 6 Questions to Ask When Buying a New Construction Home!
(Andrew Finney Team)
4. Policy Started in 2019... How Does it Look Now? (REAL Numbers)
(Insurance Business Concepts (IBC) Global)
5. House Sizes Are Getting Absurd
(Stewart Hicks)
6. The Best Way To Buy A House - Dave Ramsey Rant
(The Ramsey Show - Highlights)


Top Articles
Latest Posts
Article information

Author: Otha Schamberger

Last Updated: 20/08/2023

Views: 5895

Rating: 4.4 / 5 (55 voted)

Reviews: 94% of readers found this page helpful

Author information

Name: Otha Schamberger

Birthday: 1999-08-15

Address: Suite 490 606 Hammes Ferry, Carterhaven, IL 62290

Phone: +8557035444877

Job: Forward IT Agent

Hobby: Fishing, Flying, Jewelry making, Digital arts, Sand art, Parkour, tabletop games

Introduction: My name is Otha Schamberger, I am a vast, good, healthy, cheerful, energetic, gorgeous, magnificent person who loves writing and wants to share my knowledge and understanding with you.