All home buyers have some repair work ahead of them. Sometimes, only finishing touches are needed. In other cases, major systems need replacement.
A new buyer should budget for significant costs in the first year. But the real kicker is just how much people who buy brand-new homes will likely spend. On average, a typical buyer of a newly built home spends $12K to $16K and more to spruce up the place. And that’s just in the first year of homeownership.
Here’s How the Key Costs Break Down
These figures come from the National Association of Home Builders, which combed through the results produced by the Bureau of Labor Statistics in its Consumer Expenditure Survey. Here are the common expenditures for the owner of a home with new construction:
- Landscaping and extra work such as fences, outdoor spaces, and driveways: $7,167+.
- New appliances: $4,254.
- Furniture: $5,122.
So far, that’s $16,543.
What might make a buyer shell out even more cash? Some buyers dive right into ambitious tasks — finishing a basement or attic area. Some turn porches into Florida rooms. Some create backyard cottages, or build additional rooms.
☛ Making major changes to your home might involve permits, liens, or maybe both! Here’s how home renovations can impact your real estate title.
Compared to people who’ve held onto their homes for a few years, a new buyer spends a remarkable amount. People who pass up new construction and buy from a current occupant fork out much less cash on first-year fixes — half the amount spent by the typical buyers of newly built homes. And the typical new owner pays four times the upgrade expenses an established homeowner does.
That said, we shouldn’t underestimate what an established homeowner is doing with renovations today. The 2022 Houzz & Home Renovation Trends Survey polled more than 67,000 U.S. homeowners. The results suggest that homes are getting older, and homeowners expect, on average, to spend $15K on home improvements within a year. That’s a big jump up from $10K in past years.
Alteration Costs Vary Widely, With New Construction on the High End
During the first year after closing, new home buyers spend close to $12,000 for various fixes and modifications. For existing homes, buyers spend a relatively modest $5,800 in their first year of ownership.
Many homeowners renovate homes they have owned for a while. These tenured homeowners have built up their equity and can leverage it to cover the cost of the upgrades. This is where a home equity line of credit (HELOC) can come in handy.
☛ A homeowner pays interest on a HELOC, but this can be deducted at tax time if the financing is used to upgrade a home and enhance its value. Find out more from Deeds.com about how new buyers and longtime homeowners alike can finance home improvement goals.
Newly built home buyers pick up their keys and then pay an extra $4,000+ on outdoor upgrades to their homes. That’s in addition to $3,167 they pay for yard upkeep. That’s over $7K in total.
The typical new construction home buyers, averaged across the board, pay $1,740 — a lot more than people buying or already established in existing homes — on finishing basements or attics, or enclosing porches. Many established homeowners aren’t concerned with finishing unfinished parts of their homes, if they have any. People who buy existing homes spend less than $300 in their first year on these things, on average.
Across the board, the average expenditures for adding a new porch or other home addition come to just over $1K for the buyers of new construction, versus less than $300 in the same time period for people who own or buy existing homes.
☛ Planning to move into a fixer-upper? Take a look at Everything You Wanted to Know (or Not!) About Permits.
Home Buyers Are Furniture Buyers
After buyers move into their newly constructed homes, they do a lot of furniture shopping. In the first year, the typical owner of a newly built home spends more than $5K on furnishings. That’s about twice as much as people spend when they buy already-existing homes.
For people who have occupied a home more than a year, 1K would be high.
What are the most expensive pieces of furniture on a home buyer’s shopping list? Couches, mattresses, box springs, frames and headboards. People buying newly constructed homes typically spend close to $1,600 on these items alone. People buying previously owned homes spend less than half that amount. People who have lived in their homes more than a year spend under $400, on average, in a given year.
Interior decorating is a major need for anyone buying a brand-new house. These buyers should expect to pay more than $500 for curtains, blinds, and other window covering items in the first year of ownership. People who buy existing homes might not need to spend anything, but those who do buy window coverings are spending less that $200 on average. After the first year of living in a home, this spending drops to a minimal amount.
Buyers of Newly Built Homes Spend a Lot on Appliances
Buyers of new construction usually do not feel the need to spend money on painting, plastering, or remodeling rooms. They don’t need to install new flooring. Their roofs and exterior walls are usually in pristine condition and well insulated. Windows, doors, and all major systems are new, so buyers of new construction shouldn’t need to order them.
But (surprise!) they often do need to buy home appliances. People who buy new construction splash out a lot more money than other groups of owners for freezers and refrigerators, washing machines and dryers, and outdoor equipment.
Newly constructed homes usually do contain appliances. Well, mostly. For example, information supplied from 2019 by Home Innovation Research Labs indicates that most new single-unit houses usually come with no clothes dryers. Most of them, though, come equipped with fully outfitted kitchens.
In any case, surveys suggest that new home buyers aren’t satisfied with the way their newly built homes are equipped.
And the spending adds up. Buyers of newly built homes pay close to $4,300, on average, for their new appliances. People who buy new construction also spend a notable amount on TV systems for various rooms in their new homes.
People who buy existing homes average about $2,500 replacing their home’s appliances in the twelve months after closing. During that same year’s span of time, a homeowner who has owned for more than a year spends, on average, about $1,400 on appliances. Most of this money goes to purchase clothes washers and clothes dryers. After that, the most spending goes to freezers and fridges. Then to lawn equipment, entertainment systems and computer tech.
Buying a home means keeping some money in reserve for anything a new owner might need. Expect significant furnishing and improvement costs. This is true for homes of any age, especially older homes and newly constructed homes.
Natalia Siniavskaia for Eye on Housing, a blog by the National Association of Home Builders: What Do Home Buyers Buy After Moving? (Jun. 13, 2022).
Elyse for the Senior Real Estate Specialist (SRES®) Blog of the National Association of REALTORS®: Factor in Cost of Alterations in Home Purchase – New Buyers Spend Nearly $12,000 on Upgrades, Repairs (Jul. 20, 2022).
Houzz Research: 2022 U.S. Houzz & Home Study: Renovation Trends (Apr. 27, 2022).