Hoping to buy a brand-new place to call home? It’s going to cost you, according to a new study.
The difference between the median price of a newly constructed house versus an existing property in the Salt Lake City metro area is just over $10,000 — $551,391 for a home that’s just been built compared to $541,370 for one that’s already been lived in.
Nationwide, that gap is much bigger. The price tag is more than $42,000 higher for a new house, based on a U.S. median price of $429,993 for new construction and $387,817 for an existing home.
The data, put together for a company that sells custom home storage solutions, Inspired Closets, doesn’t specify the size for the median-priced houses. Newer builds tend to be bigger than existing homes, with more closet and other storage space.
“New construction homes give buyers room to dream about stylish custom layouts, smart energy features, and a clean slate to make their own. But as appealing as these perks are, that blank canvas can come with a bigger price tag,” the company states in a news release.
And if current homeowners need more incentive to stay put and renovate, the company also points out the difference in median monthly mortgage payments, especially for homes financed before rates started rising a few years ago.
The monthly mortgage payment on a median-priced new home was around $1,327 in 2018, according to the study, and $1,200 for existing homeowners. Today, someone buying a newly built home will pay an average of $2,243 a month, compared to $1,574 for current homeowners.
For the Salt Lake area, the study calculated buyers of newly constructed homes would pay a median mortgage payment of $2,876 while the payment reported by existing homeowners is nearly $1,100 less, at $1,784.
That 61.2% “new construction payment gap” kept the Salt Lake area off the study’s list of the 10 most expensive places to “upgrade” to a brand-new house. Topping that list is Los Angeles, where a new build costs 282.6% more than what an existing homeowner pays.
Of course, the median price for a newly constructed home in LA is more than $1.7 million, more than three times higher than in the Salt Lake area. Boston is next on the list, followed by San Francisco, San Jose, Miami, San Diego, Milwaukee, New York City, Detroit and Pittsburgh.
The top 10 places deemed the cheapest to make the move to a new build are all in Texas and Florida, the study found. San Antonio, the only major metro area where a newly constructed home is actually cheaper than an existing one, tops that list.
Looking just at the median price of a new construction home, the Salt Lake area is 26th among 110 metro areas nationwide. But the Ogden area is 24th, posting a cost of $557,575, nearly $6,200 more than Salt Lake. The Provo area, with a $520,330 median new build price, is 33rd.
