Deciding whether to buy a home or build a new one is becoming a popular question as housing inventory remains low. US Department of Housing and Urban Development (HUD) reported 1,682,000 building permits for new residential constructions in February alone. This is a 17 percent increase from February 2020. Whether this increase stems from low inventory or a shift in society's preferences, building new residential homes is becoming more popular to new homeowners. 

Many of our buyers are struggling to find a home that meets their requirements, or they're afraid to overpay for a home because prices continue to rise. Still, buying a home is part of the American Dream, and everyone is looking for a way to make that dream come true.

If you're trying to decide if you want to buy an existing home or build a custom home, here are some facts that should help aid your decision. 

Key takeaways: 

• Benefits of customizing a home
• Benefits of buying an existing home
• Cost of building materials and labor
• Time is money 

There are pros and cons to each. Ultimately, it's up to you to weigh your options and decide which one is best in your situation. In general, people who aren't moving very far and have lots of time to invest in the process will have a better experience building a new home. Also, if you have a very specific taste that you're not going to find in an existing home, you might have to go the custom build route to get what you want. If you need to move quickly, you might not have enough time to start a new build. Customizing your home is a dream that many buyers only.

Benefits of Customizing a Home

Have you ever made a list of everything you'd like to have in a home? We have, too! A lot of those dreams can come true if you decide to build a custom home. You can have that man cave you've always wanted or space for all of your artwork. Want an inground pool dug in your back yard with an industrial-size kitchen? The possibilities are endless if you can find the right designer and architects. 

You are involved in nearly every step of the way and can control the design process to ensure you get everything you want. Building a new home can be a great way to see the quality of materials being used. In buying an existing home, your best guess at the home's status is through an inspection. The home might meet the requirements at the time, but it's hard to predict how long different parts of the home will last. Being involved in the building process, you get to observe and essentially manage the quality of materials and can better predict how long each material should last. 

Benefits of Buying an Existing Home

The assumption with an existing home is that it is already built. Naturally, it's easier and faster to move into a residence that is already standing. Even during the time it might take to tour, make an offer, and close the deal, it's still significantly faster to buy an existing home than to wait for a new structure to be built. 

If you need to move quickly or don't have time to wait on a new build, you can move into an existing home as soon as the owners allow. Even better, if the home is move-in ready, you won't have to do any extra work. Existing homes are convenient, fast, and predictable. 

Costs of Building Materials and Labor

The size of your home and how expensive it will be to build relies heavily on how much it will cost to build. The cost of imports and tariffs on wood, steel, and other materials fluctuate according to the global market. Getting approved for a $250,000 mortgage could go a long way when the cost of materials is down, but it might not cover everything you'd like if materials are expensive. You also have to consider the amount of labor the contractors will use to build the home. If you want a massive home, you might have to pay for a few more workers than a smaller home would require. 

Time is Money

If you've ever talked with someone who waited for new construction, then you've probably heard horror stories about how long it took for them to build the house. It's pretty common for new home construction to get delayed or knocked off schedule in some way. The longer it takes to build the home, you're probably losing money somehow. Whether you're paying the architect during this time or paying rent while you wait, it's expensive and takes a significant amount of time to build a home. Keep that in mind when making your decision.