One of the most important financial decisions you’ll ever make is buying a house. Most people have the majority (if not the entirety) of their net worth tied up in home equity, meaning it’s by far their most valuable asset. On top of that, this is going to be your living space, possibly for years, if not decades, so it pays to make the most appropriate choice.

Most prospective homeowners eventually get to a point where they have to decide whether it’s better to invest in a brand-new house, designed and built from scratch, or to buy an existing house. So which is better?

Should You Invest in a New House or Buy an Existing One? - loan, home loan, buy house, build house

There are many factors to consider.

Home Loan Availability

First, consider the approval process for loans. Home loans work mostly the same for a new purchase and an existing home purchase, with a handful of key differences. For example, you may face a different level of scrutiny during the home appraisal process for an existing property. However, as long as you have enough money for the down payment, a decent credit history, and proof of consistent income that could allow you to afford the home, you should be able to qualify either way. In other words, home loans are a negligible factor here.

Customization Options

One of the biggest advantages of purchasing a new home (i.e., building one from scratch) is you’ll get to customize almost everything. You can choose the plot of land on which you build. You can choose your builder. You can customize the shape and layout of your home, and almost everything in the interior, down to the raw materials used during construction. If you’re planning on getting your dream home and you want everything just so, buying a new home is your best option. However, if you’re more flexible, or if you don’t know what you want, an existing home may be better.

Total Price

You’ll also want to consider the total price of the home. In many cases (but not all), building a new house will be more expensive than buying an existing house. If you’re looking to buy a home on a budget, buying an existing home is almost always your best option.

There are exceptions to this, however. If you’re buying an existing home with historical value, or if it’s in a heavily competitive area, it may end up being more expensive than building your own home in a less competitive, more open area.

In addition, new homes are easier to maintain and are more efficient than older homes. That means you’ll spend less money on upkeep and less money on utility bills over the duration of your home ownership. This can mitigate their extra initial costs.

Value Over Time

You may consider the value of your home as an investment. In other words, is this an asset that will increase in value over time? If so, which will increase more—a new home or an existing home?

This is a hard question to answer. It’s dependent on many variables, including the condition of the home, the state of the neighborhood, the growth trajectory of similar properties, and how well you maintain the home. New homes are often easier to maintain, which means they may stay in good condition longer, but older homes may increase in value at a faster rate, due to their unique nature. Ultimately, this factor could swing either way.

Purchasing Logistics

The purchasing logistics for both new and existing homes can be challenging, albeit in different ways. If you decide to build a new home, you may need to make lots of high-profile decisions, and supervise the building process to make sure the specs are followed. You may also need to wait several months for your new homes to be built.

However, if you’re buying an existing home, you may have trouble finding a house that fits your desired specifications. You may find the perfect house immediately, or it may take many months of home searching.


Older homes often have more character than newer homes, though this is a subjective factor. Some people prefer older-style doors and fixtures, which only older homes will have. Older homes also tend to be in well-established neighborhoods, with mature and lush vegetation, and neighbors who have been in the neighborhood for many years.

There isn’t a “better” option between buying an existing house and building a new one. Instead, there are advantages and disadvantages to each. Consider your goals, your budget, and the prices in your area before making a final decision, and if you feel conflicted, spend some time talking to agents and/or home builders in your area to help you make up your mind.