Are New Construction Homes Even Worth Buying Anymore? How To Protect Yourself
The Bottom Line
Not all new construction homes are trouble-free. You have to remain diligent despite buying a brand-new home.
Paper-thin drywall. Crooked moldings. Cracked grout and tiles. Framing gaps so wide you could drive a truck through them. There are plenty of new-home horror stories on social media these days.
Are today’s new construction homes really crafted with such shoddy workmanship? And if so, is the only solution to grit your teeth and buy a Victorian-era money pit? After all, existing homes, especially older ones, have their own problems to solve.
It may seem like your choices are limited to drafty old homes or cheaply built new ones. But if you’re considering buying new, there are several ways to benefit from the many advantages of new construction without compromising on quality.
We talked to several experts to get the low-down on the state of new-home construction and offer tips for buyers in today’s market.
Should You Get a New Construction Home Inspection? Yes. Always.
Fred Rodrigues is a licensed home inspector, Certified Master Inspector, and the owner of Damn Good Inspections, with locations in South and Central Florida. As you can imagine, he’s seen a huge variation in quality over the years he’s been inspecting new homes.
“Some companies do quality control better than others,” he said. “I'm not going to names, but we know that when we get certain certain builders, you know, we keep an eye out.”
On one recent inspection, he says, a new home was missing shingles on the roof. In another, a simple plumbing test resulted in sewage backup that flooded the entire first floor.
“They had to actually break the concrete slab inside the house so they could fix the sewer line,” he said. That’s the kind of surprise the average new-home buyer doesn’t want to encounter.
As a home inspector, “we are there to tell the story of the house,” he said. It’s up to the buyer and builder to negotiate a fix and who will cover it.
Today’s New-Construction Homes: Smaller Footprints, Higher Costs, Slimmer Margins
The average sales price of a new single-family home in 2024 was a record-breaking $665,298, according to a survey from the National Association of Home Builders (NAHB). That includes construction costs of $428,215, plus the price of the lot, financing, and overhead costs. It represents an increase of 9.2% over 2022’s already-high figures, according to ResiClub, and a difference of $154,998 over the average sales price of $510,300 in Q4 2024.
While prices have gone up, square footage has fallen to 2,647 s.f., down from a peak of 2,802 s.f. in 2015.
“The smaller square footage in recent years is a response by builders to meet the current housing affordability challenges, especially as the share of first-time new home buyers is falling,” writes NAHB’s Eric Lynch in the association’s 2024 report on construction costs. Meanwhile, rising costs are attributed to a pandemic-era surge in demand, which quickly put a major damper on affordability – but perhaps contributed to builder profits. As of 2024, NAHB estimates 11% of the sale price of a new build is builder profit. That’s up from 10.1% in 2022, according to Lynch.
New vs. Existing Homes: Which Is Better?
Why, then, do buyers still flock to new construction homes? The National Association of Realtors notes that 42% of buyers opt for new homes to avoid the hassle of renovations.
“They love new,” says Joseph Garcia, an associate broker with Weichert Realtors in Farmingdale, New York.
With new construction, you get move-in ready homes. Buyers today are working more than ever and their kids are involved in more activities. Spending a day looking at flooring options or paint colors just isn't a reality.
“With new construction, you get move-in ready homes. Buyers today are working more than ever and their kids are involved in more activities. Spending a day looking at flooring options or paint colors just isn't a reality” for them, he said. “They also understand including the cost in a mortgage over 30 years often makes the higher price of new more affordable than expensive renovations.”
Pros and Cons of Existing and New Homes
| Existing Homes | New Construction |
|---|---|
| ↑ Stronger materials, like old-growth lumber | ↑ Modern code requirements |
| ↑ Traditional craftsmanship | ↑ Better weather-resistance |
| ↓ Poor energy efficiency | ↑ Better energy efficiency |
| ↓ Near or past materials lifespan | ↓ Less charm, fewer details |
Compared to “used” homes, few people pay cash for new homes.
Just 8% of new homes were purchased with cash in 2023, according to the U.S. Census Bureau’s State of Construction report. By contrast, a record 26% of all homes were bought with cash in 2024, according to NAR data, with nearly a third (31%) of repeat buyers skipping financing altogether.
Buyers also know that old homes may retain a few secrets behind their walls, such as old knob-and-tube wiring or lead pipes. New construction must adhere to modern code standards of safety and efficiency, which can be a relief for harried buyers – as long as the quality is up to snuff.
Why Some New Builds Have So Many Problems
The problem that crops up these days is, that quality isn’t always guaranteed, and there’s a variety of factors at play. However, the two most commonly cited are labor and materials shortages.
“We're based in Southern California, and we're seeing real issues in the construction industry right now,” said Bar Zakheim, CEO of Better Place Design & Build, a firm that specializes in ADU construction.
“The recent wildfires have sent prices for labor and materials through the roof, and there are a lot of dubious operators in the market right now offering lower prices for unlicensed or low-quality work,” Zakheim said.
Florida-based real estate investor Martin Orefice knows the struggle.
“There are always going to be lemons out there, especially in overheated markets where there isn't enough labor to go around – and that's the real problem,” he said.
New technologies and materials are good for energy efficiency, says Ryan Thewes. He’s a licensed architect in Tennessee who specializes in modern, organic home design. But new tech won’t help if the construction is subpar, he says.
“I do think labor shortages and increased material costs play a big role in this, as getting the details right takes skill and money,” he said.
If the pool of workers is getting smaller, it is tougher to find someone with the attention to detail needed to execute. Also, with material prices rising, builders are looking for ways to keep costs down so might be taking shortcuts to save money.
“And if the pool of workers is getting smaller, it is tougher to find someone with the attention to detail needed to execute,” he said. “Also, with material prices rising, builders are looking for ways to keep costs down so might be taking shortcuts to save money.” That could be detrimental in the long run.
Rodrigues, the licensed home inspector, has seen the impact of labor shortages over the last six years, as the pandemic raged and then receded.
“I was talking to a roofer today,” he said. “The concern that they have is a lack of labor because of everything, the political environment. They're saying, if you need a new roof, you better get it now, because price tends to go up as the pool of laborers gets smaller and smaller,” he said.
These ongoing shortages will drive up wages and affect not only quality but overall construction costs as well.
How to Protect Yourself as a Buyer: 6 Tips
If you have your heart set on a new construction home, you should still go for it. Just make sure to protect yourself and have a plan for when things inevitably go wrong.
“Nothing is perfect,” Rodrigues said. “We've never done an inspection that we haven't found things,” he said. But you can get closer to perfect if you do your homework.
1. Check the Builder’s Reputation
As with any profession, some pros are better than others. Take extra care to check the builder’s reputation. Verify that their contractors and subcontractors are licensed and insured, and read reviews to see other homeowners’ experiences.
2. Read That Contract Carefully
It’s easy to assume you understand what you’re signing up for. But it’s extremely important to read your contract carefully. It will tell you what to expect, and it will also let you know your rights. Don’t be afraid to exercise them if you’re not receiving what you’ve paid for.
3. Hire an Independent Inspector
One of the most important things you can do is to hire a licensed, insured third-party inspector. They are trained to examine the entire building, from the roof to the basement, and can spot problems early on that could be a major headache down the road. Experienced inspectors also have a range of tools at their disposal, such as drones and infrared sensors, that can detect problems that may not be visible at first glance.
4. Visit the Site in Person
Nothing beats visiting the site and laying eyes on your new home yourself. Stop by the property at multiple points during the construction process. If something looks off, bring it up to the contractor right away, before it develops into a bigger problem.
5. Lean on Professional Help
Sometimes, you may need to negotiate with the builder if troubles arise. Rodrigues recommends working with your real estate agent or attorney to resolve the matter, as they’re experienced in the art of negotiating and can help you stand up for your rights.
6. Use Your Warranty With an '11-Month Inspection'
Make sure the home is warranted against defects in workmanship. Be aware of what is covered and what is not. Rodrigues recommends what’s called an 11-month inspection. If you have a one-year builder’s warranty, then in the 11th month of owning your home, have the inspector do one more once-over while the home is still under warranty. Any problems that have cropped up can be taken to the builder to be resolved.
“At the end of the day, you’re signing on that dotted line to get a product,” he said.
