Study: More Homebuyers Prefer New-Construction Homes

Pie chart showing the percentage of people who prefer new home homes to used ones and those who are undecided.

Survey says: More homebuyers are now considering newly built homes.

According to a new study by Builder Homesite Inc. (BHI) and Builders Digital Experince (BDX), the parent companies of New Home Source, more home shoppers are considering new-construction homes during their home searches.

The report, 2016 Home Shopper & Buyer Insights Study, found that two in three (59 percent) active home shoppers strongly consider a brand-new home offered by a builder – a 20 percent increase from just three years ago. Interest in custom and build-on-your-lot homes has also grown significantly, with 42 percent strongly considering this option, up from just 29 percent three years ago.

“Consumers are placing more value on floor plans that meet today’s way of living and homes offering energy efficiency, smart home technology and the best-in-class building materials,” says Julie Ward, BDX director of research. “New-construction homes outshine existing homes on these and many other important factors that affect home choice. The ability to customize is also increasingly important, as home shoppers want their investment to reflect their values and meet their family’s unique personality.”

Intuitively, preference for new-construction homes is up as well year over year. When asked to make a choice, one in three active home shoppers prefer new homes offered by a homebuilder or a custom-built on their own lot. Another one-third of active home shoppers are sitting on the fence and are likely shopping and comparing the trade-offs between a new home and a used home.

So, why all the renewed interest in newly built homes?

As more people see their home as an extension of their personality, more homebuyers want to find a house that they can highly personalize from the get-go, making new homes an attractive option.

“We know that market factors, inventory, location and ultimately the home shopper’s budget have an undisputable affect on home purchasing,” says Ward. “However, homebuilders and new-home communities are focusing more than ever on how families live today, the active adult buyer’s needs and first-time buyer’s goals for homeownership. These factors, along with builders offering homes in communities with outstanding amenities and in safer neighborhoods, explains the increased preference for new-construction homes quite well.”

Annette Brown, a New Home Source Insights panelist from California, says she looked at both newly built homes and resale when shopping and ultimately went with a new almost-3,000 sq. ft. home in a desirable area.

“We decided to build (our home) because everything would be new and could be customized to our liking,” says Brown. In addition to being able to personalize the home, Brown says a new home was appealing because of the option for a large home lot size, as well as its location in a good school district, no HOA fee and an easy commute to work.”

8 Reasons Buyers Prefer New Homes Over Resale

According to the report, these are the top 8 reasons that affect home choice and where new-construction homes deliver on expectations and beat out existing homes:

1. Quality of construction
2. Safer neighborhood
3. Better floor plans for me and my family
4. Lower maintenance costs
5. More living space
6. Ability to customize
7. Energy efficiency
8. Architecture and overall design

Who Prefers New Homes?

When it comes to different generations, Boomers and Gen X home shoppers show the highest consideration for new-construction homes (36 percent and 35 percent, respectively in 2016), while 32 percent of Millennials are now considering new – up 5 percent from a few years ago.

The study also interviewed thousands of recent homebuyers. Among those who purchased a new-construction home, 9 in 10 are “extremely or very” satisfied with their purchase decision to start fresh and buy a new-construction home.

One shopper noted: “I found the home of my dreams. The process of researching, finding and finally purchasing a home took a while, but it was worth the time and effort.”

And a notable 8 in 10 say their expectations were exceeded in that the home met all of their “must have” criteria.
To learn more about the 2016 Home Shopper & Buyer Insights Study, contact

Patricia L. Garcia is an award-winning journalist and former content manager for NewHomeSource. You can find her on Google+.

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