In the 1970s, approximately 300,000 new homes were being built in the United States each year. Now, 250,000 new homes need to be built each year to keep up with demand.
Ask real estate agents or homebuyers about the availability of homes for sale in the last few years, and they will probably tell you that there aren’t enough to go around. Homebuyers often make offers on multiple homes before they’re able to purchase one. Real estate agents say the competition is fierce.
So, if you’re looking to buy right now, it might be in your best interest to build on your lot rather than hope you will find your dream home. Here are some reasons why.
You Can Customize
Perhaps the biggest draw for people who choose to build on their lot, in a new subdivision, or on some acreage is so that they can customize a home to their tastes. You no longer have to choose from cookie-cutter designs or search endlessly for what you truly want. Instead, you can build the dream home you’ve always wanted.
You Already Own Land
If you already own some land, you can build on your lot for less than it might cost to buy an existing home. Interest rates are lower than they’ve been in nearly 50 years, so financing new construction homes could be easier than ever. You can build on your lot or even on a new one for less than in past years.
Your Home is Falling Apart
If you’ve been delaying your move because you haven’t found a new home or, better yet, you want to stay where you are, the answer could be to tear down your home and build on your own acreage. While this may sound more costly, if you’re replacing a mobile home or have damage to your existing structure, such as from a fire, you could be saving money if you build on your lot.
If you build a new home on your land, insurance may cover some of the cost if your home is damaged. You also have the advantage of reusing some materials, such as the foundation. Your site development is already done, so you won’t have to incur that cost. You may even have some or all of your mortgage paid down, so your move-in equity will be substantially higher.
Whatever your situation, building your own home doesn’t have to be difficult as long as you keep some key points in mind.
You need to be realistic about several things when building new houses. Most importantly, be realistic about your budget. You need to know what you can afford, and then you need to stick to that number. Make sure you have a reputable builder who can tell you honestly what things are going to cost. And it’s a good idea to have a little extra set aside for incidentals.
You also need to be realistic about what you actually need in your new home. Do you really need triple the space you had before? Or can the same space do double-duty? Instead of a family room, living room, playroom, and office all on the first floor, perhaps you can hide the toys in the family room with built-in shelving, or add doors on the dining room to give you some quiet at the dining room table when you need to work or pay bills. You should sit down and make a list beforehand about what you really need in the new house and what you really just want.
Lastly, be realistic about the timeline. New houses take time to build. There are often delays because of product availability, weather, or scheduling conflicts. Know that eventually the work will get done, but a certain amount of patience will be required on your part. After all, this is your dream home and you don’t want it to be rushed.
This may be the most important tip. Make sure you communicate with everyone so that there are no surprises. You will likely be dealing with a builder, architect, site workers, lawyers, etc. Attending meetings and staying in touch will help everyone stay on the same page. It’s also important to choose a team that is willing to let you know what’s going on along the way.