Hidden costs loom large for buyers in the first year of homeownership, and, surprisingly, that can be even more true with a new build, according to the National Association of Homebuilders.
Buyers of newly built houses are even more likely to spend big on home improvements in their first year of ownership, according to data from the U.S. government’s Consumer Expenditure Survey.
The National Association of Homebuilders crunched this survey data and found that buyers of newly constructed homes spent an average of $11,930 on alterations and repairs in their first year of ownership. That’s more than double the amount spent on improvements in the first year after purchasing an existing home.
The majority of that amount was spent on external improvements — including patios, pools, landscaping and other desirable outdoor features.
A significant share of the first-year spending also went toward appliances, which may not always be on the radar of the hopeful owner of a house under construction.
Buyers of new homes spent $4,254 on appliances in the first year of ownership, compared to $2,499 by buyers of existing homes. Televisions are included in this category, and are a popular purchase for a new homeowner.
But NAHB’s analysis finds that owners of new homes are spending more on washers and dryers, refrigerators and lawn equipment as well.
“The high level of spending by new home buyers may seem surprising considering that many new homes come with installed appliances,” the NAHB report reads, “but suggests that these purchases are nevertheless more frequent among these households.”
The report points out that most new homes built in 2019 came without clothes dryers, according to a builder practices survey from Home Innovation Research Labs.
Meanwhile, new home buyers spend little on other appliances that are traditionally installed by the builder and included in the purchase price. Owners of newly built homes rarely have to spend on stoves, ranges and ovens in their first year in the house.
The buyer of a newly built home is also likely to spend more furnishing the interior.
On average, the owner of a newly built home spends $5,122 on furnishings in the first year, compared to $2,665 for the new owner of an existing house.
A large chunk of this goes toward sofas and bedroom furniture and items. A new-house buyer spends on average $860 on sofas and another $718 on bedroom furnishings in the first year.
Some of this gap in first-year homeownership costs may be due to differences in income. New homes tend to be more expensive nationwide than existing structures, and attract buyers with bigger budgets for home improvements and nicer appliances.
Predictably, a buyer who purchases an existing home is more likely to pour their cash into the less sexy aspects of homeownership. Things like HVAC repairs, roofing, windows, flooring and paint are more likely to be on the to-do list of the buyer of an existing house in the first year of ownership.
Average 1st-year costs
Here’s the breakdown of the average first-year costs for each type of homebuyer, according to NAHB’s analysis of the U.S. Consumer Expenditure Survey.
For buyers of new homes
- Alterations and repairs: $11,930
- Furnishings: $5,122
- Appliances: $4,254
For buyers of existing homes
- Alterations and repairs: $5,761
- Furnishings: $2,665
- Appliances: $2,499
For owners who didn’t move
- Alterations and repairs: $2,966
- Furnishings: $904
- Appliances: $1,442
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