Building permits, construction both below estimate in March

Here are some tips for homebuyers to save on costs with newly built homes, experts say

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Buyers of newly built homes can come across a number of sticker shocks.

In February, the median sale price for new construction sold in the U.S. was $400,500, according to the U.S. Census Bureau and the Department of Housing and Urban Development.

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But the value of a newly built house will depend on multiple factors, including the finishes that are added, said certified financial planner Veronica Fuentes, a wealth management advisor based in Washington, D.C.

“They want to know what kind of windows you want, flooring, siding, window panels, what kind of doors, where you want the outlets, what kind of light switches do you want. Depending on what you’re picking, they’re adding up the tab,” Fuentes said.

To save on costs with a new build, it may be in a potential buyer’s best interest to hire a contractor later on to add desired finishes, experts say.

“Think about those elements that could be easily added at a later date,” said Angie Hicks, home expert and co-founder of Angi, an online marketplace that connects homeowners with professional contractors for home maintenance or renovations.

How to save on construction costs

While multiple elements contribute to the overall cost of a newly built house, one way to keep the price within range is by deferring elements for future renovations or upgrades, experts say.

To that point, homeowners spent on average $13,667 across 11.1 projects in 2023, a slightly higher level compared with 2022, according to the State of Home Spending by Angi. The survey polled 6,400 consumers between Oct. 22 and Oct. 23.

Almost half (46%) of homeowners used cash from savings to cover renovations. About 20% used credit cards, while a minority, 7%, refinanced an existing loan and 5% used a home equity line of credit loan.

“I tell my clients to be very conservative,” said Fuentes, as buyers can always change the knobs, the flooring and the paint on the walls through hired contractors.

To that point, experts recommend focusing on the structural elements.

While costs range depending on materials, labors and location, most homeowners paid between $14,611 and $41,440 to remodel a kitchen in 2024, Angi found. Meanwhile, bathroom remodels can range from $6,629 to $17,536.

If you know you will be upgrading features in the house, go with the basic or lowest priced features for now, Hicks said.

“There’s no reason to finish it out right when you build the house necessarily,” Hicks said. “Those are things that can be added later and can potentially save you in the near term.”

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