The $25K Reason a New Home Might Be Cheaper Than an Old One

New-construction homes often come with higher sticker prices, but a new analysis from Realtor.com® suggests they can be cheaper to own over time—potentially flipping the math for house hunters.

Nationally, buyers of new homes can expect to save an average of $25,335 over 10 years compared with buyers of 20-year-old homes, thanks to lower utility bills and fewer major system replacements, according to the Total Cost of Ownership report released on Thursday.

In some places, the savings are even larger. Buyers in Massachusetts can save nearly $39,000 over a decade. And in 16 of the nation’s 300 largest metros, the savings are big enough to erase the price gap between the median new-construction listing and the median existing-home listing entirely.

The findings complicate one of the biggest assumptions in the housing market today: that the lower list price of an existing home automatically makes it the more affordable option.

“The real story here is that choosing new construction expands a buyer’s budget,” says Joel Berner, senior economist at Realtor.com and author of the report. “What [buyers] thought they could afford in an existing home when they accounted for operating costs is less than what they can afford in a new home because of the savings we highlight here.”

It’s an especially important finding as affordability pressures expand beyond mortgage interest into higher energy bills, repairs, and insurance costs. Through this lens, the better deal may not be the home that costs less to buy—it may be the one that costs less to own.

The hidden costs new homes reduce

Newer homes are more likely to come with efficient heating and cooling systems, tighter insulation, better windows, and newer major components—all features that can lower the kinds of expenses that drive up the cost of ownership of older homes.

“These systems have a massive impact on both monthly carrying costs and future capital expenditures,” says Robert W. Burrage of RWB Concierge Builder, based in Palm Beach County, FL. 

“A home with older HVAC systems, poor insulation, and outdated windows may look attractive on paper, but buyers often underestimate how quickly those inefficiencies add up through utility bills, maintenance, and replacement costs,” he adds.

These pressures have become harder to ignore as utility rates have climbed sharply in recent years. One estimate found that average annual shelter and utility expenses rose by $4,934 from 2019 to 2025; and in 2024, residential electricity customers had their service shut off 13.4 million times because of unpaid bills.

That pressure is unlikely to ease anytime soon, as rising demand and grid strain threaten to keep costs high. The report does account for expected utility-cost increases, but Berner says the savings estimated in the report should be considered as a “conservative base case.”

“We incorporate escalation rates for energy prices in this model, so we do account for some growth in the costs of utilities,” he explains. “However, there is always the possibility that energy prices grow faster than expectations, which makes the value of new construction even greater.”

So, efficiency becomes more valuable as energy gets more expensive. The same home that saves money today could save even more if electricity, natural gas, heating oil, or other energy costs keep rising faster than forecast.

Or, in Berner’s words: “Saving on energy usage is always a positive, but the more expensive that energy becomes, the more pronounced the savings relative to buying an existing home is.”

Where new homes save buyers the most

The report finds that new-construction savings vary widely by state, with the biggest 10-year payoff concentrated in the Northeast.

That regional split comes down to a simple but powerful equation: Homes in these colder climates use more energy for heating, which gives efficient new construction more room to save buyers money. 

Recent data from the National Energy Assistance Directors Association shows that New Hampshire, Maine, and Vermont all saw double-digit electricity price increases from January to October 2025, while Massachusetts had one of the highest electricity prices in the country at 31.4 cents per kilowatt-hour.

Building codes also help widen the gap between older and newer homes. Several of the top-savings states have adopted newer versions of the International Energy Conservation Code, or IECC, the model that sets minimum standards for home energy efficiency.

These kinds of costs sneak up on owners.

“Most people don’t even realize they’re hemorrhaging money until they replace the windows or add spray-foam insulation to the roof,” says Christian Perry, a luxury real estate agent based in Connecticut and New York.

To his point, in Massachusetts, a buyer of a new-construction home can expect to save nearly $39,000 over 10 years from lower energy use and fewer major replacement costs—the highest savings of any state.

New Hampshire follows at nearly $36,000, while Maine, Rhode Island, and Vermont each come in around $34,000.

In these markets, the savings can erase the new-build premium

In most markets, new construction still costs more upfront than a comparable existing home. But the report shows where that premium is small enough that the 10-year savings can cover the difference.

San Diego shows how quickly the math can flip. 

The median new-construction listing price there is $1,226,693, compared with $1,210,500 for an existing home—a gap of about $16,000. But the estimated 10-year savings from buying new construction are $29,243, enough to more than offset the higher upfront price.

That’s to say nothing of the additional peace of mind these homes offer.

“As far as my experience goes, newly constructed houses seem to be the ideal choice for those buyers who want to have some level of certainty regarding their investment, as well as low energy bills and minimum maintenance costs in the initial years,” says Brett Johnson, a real estate agent and founder of New Era Home Buyers in Colorado.

That pattern shows up in lower-priced markets, too.

In San Antonio, the median new-construction home is listed at $339,642, compared with $329,083 for an existing home. That is a premium of a little more than $10,500—but the estimated 10-year savings come to $18,227.

Builder incentives can strengthen the math

The savings modeled in the report may not even capture the full financial advantage of buying new construction in today’s market.

Take Chantea and Jeffrey Coonce, for example.

The couple bought their Peoria, AZ, home when they were a family of three. When they became a family of five, they needed more space. Like many homeowners, they were reluctant to give up the ultralow mortgage rate of 2.5%.

They knew they couldn’t make the move unless they found a new mortgage below 6%. But with rates stubbornly above that threshold, they worried they’d be stuck in place—until a builder incentive changed the math.

Their builder initially offered a 4.99% interest rate on a 30-year fixed mortgage. During negotiations, however, the Coonces secured a permanent rate buydown, lowering their interest rate to 4.373% for the life of the loan.

That kind of incentive only sweetens the deal on top of the lower utility bills and fewer major replacements modeled in the report—and they’re common in today’s market, according to the report.

The average new-construction buyer pays about a full percentage point less on a 30-year mortgage than an existing-home buyer, the report found. On a $450,000 home purchase with 10% down, the difference between a 6.3% rate and a 5.3% rate saves more than $250 per month, or roughly $30,000 over 10 years.

Warranties can also push the savings higher. The report’s replacement-cost estimates assume homeowners pay out of pocket for major repairs and replacements. But many new homes come with builder warranties, including systems warranties that may cover early HVAC issues. If a warranty absorbs some of those costs, the buyer’s real savings could be higher than the model shows.

“I like to offer a one-year warranty on all of the homes I build and sell,” says Perry. “That gives buyers a level of comfort and certainty they’re looking for when purchasing a home. It’s one of my key differentiators. When buyers know going in that the property isn’t going to be a money pit, they become much more confident and excited about the purchase.”

It also makes the headline savings figure look more like a floor than a ceiling. Still, it doesn’t mean an existing home will always cost more in the long run.

RWB Concierge Builder’s Burrage says buyers should take the same approach when evaluating the apparent discount on an older home.

“It’s far more nuanced than simply looking at the year a home was built,” he explains. “Buyers often assume an older home is the better value because the purchase price is lower, but the true cost of ownership is tied to the condition and life span of the infrastructure behind the walls.”