Is it Cheaper to Remodel or Buy a New House?

Remodeling

• Remodeling an existing house allows homeowners to keep elements of the house they love, but improve on the existing design. People who own a home in a nice area or decent school district may not want to trade the convenience for a new home; these people should budget for remodeling.

New House

• A new house is cheaper and more efficient. Not only is the house new, but so are all of the appliances and systems in the house. The drawbacks include the house's design, location and vegetation. The earth and landscaping are not well-established for a new home, so issues with settling and planting are inevitable.

Remodeling Newer Home

• Remodeling a newer home is the least cost-effective choice for a homeowner. Costs have not been recovered from the new home, and the high cost of remodeling bars this choice for everyone except those willing to work with a large budget.

Extending Existing House

• If remodeling is your best choice, it is cheaper to extend the house upward instead of outward. Most wood-framed homes can carry the load of a second or third story, and this can cost about 75 percent to 85 percent of the cost of building a wing addition. The increased cost for a wing addition is incurred with the foundations and site work.

When Remodeling is Cheaper

• Remodeling can be cheaper than buying a new house only when the condition or price of the existing home or property is far below comparable houses in the area. Also, some may prefer to move to a location with a lower cost for a comparable standard of living, such as moving from California to Ohio. Although it is still cheaper to purchase a new home, the moving family may not be affected monetarily relative to their previous standard of living.