Thanks to the higher costs of owning and maintaining an older home, some buyers may be able to afford more expensive mortgage payments if they choose a newer home, a new study from the National Association of Home Builders shows. The study finds that buyers could potentially spend 36% more on a newly built home compared with a home built before 1960 because of the lower operating and maintenance costs of buying new.
Annual operating costs include maintenance, utilities, property taxes, and insurance. On average, the annual costs of operating a home amount to about 5% of the home’s value. That rate, however, can be lower on newer homes, the study found. Home owners of single-family homes built after 2010 spend about 3.2% of the home’s value per year on operating costs. The operating cost of homes that were built before 1960 could exceed 6%, the study said.
“Since operating and maintenance costs per dollar value are lower for newer homes, owners of these properties can afford more expensive mortgage payments and still end up with identical overall homeownership costs, compared to owners of older homes,” said researchers on the NAHB’s Eye on Housing blog.