WASHINGTON—The National Association of Home Builders (NAHB) is taking advantage of New Homes Month in April to show home buyers that they may be able to afford a higher priced home than anticipated. Data from the Census Bureau and Department of Housing and Urban Development’s 2011 American Housing Survey indicated that buyers can purchase a more expensive newer home and achieve the same annual operating costs as an older, existing home.
The NAHB study first looked at how utility, maintenance, property tax and insurance costs vary depending on the age of a structure. The results showed that homes built before 1960 have an average maintenance cost of $564 per year versus a home built after 2008 averages $241. After also comparing the first year after tax cost of owning a home by the year the house was built, the data indicated that a buyer can afford to pay 23 percent more of a new house than for one built before 1960 and still maintain the same amount of first year annual costs.
While mortgage payments will be greater with the higher purchase price of a newly-built home, the lower operating costs mean the home buyer will have annual costs that are about the same as if they’d bought a lesser-priced, older home with a smaller mortgage payment and higher operating expenses.
More information about this survey or the NAHB can be found here.