6 Cost-Saving Reasons to Buy New Construction

Buying a newly built house costs more -- even with all the builder incentives thrown in. The National Association of Realtors reports that the median price for existing homes in May was $166,700. The Census Bureau says the median home price for new homes was $222,600 -- or 33.5 percent higher. The price gap explains why new home sales are at historic lows – in many cases selling for less than replacement construction costs.

Numbers alone don't account for personal preference, of course, and many older homes come with charm, a sense of history, or are just in the precise neighborhood you want to live in. Often, though, the first thing someone who buys a pre-existing home does is remodel it to their tastes. Are they really coming out ahead of the money game if they immediately rip out the kitchen and bathrooms to match the ones in the beautiful new model home -- spending $100,000 in the process and living with months of construction?

There are other strong reasons to consider new over old. Building codes have tightened over time, and some older homes are not up to snuff. That doesn't mean that they will necessarily fall down in the next natural disaster, but there are things to be wary of: