Get ready to have your mind blown by the impact of interest rates on your purchasing power! Did you know that a 1% change in an interest rate can affect your purchasing power by about 10%? For example, if you qualify for a $400,000 mortgage at 3%, you’d only qualify for around $360,000 if the rate went up to 4%.
To help offset the interest rate increase, many Gulf Coast home builders offer incentives and include energy-efficient features to save money on utility bills. When deciding on a new residence, home buyers need to consider the total cost of ownership. Let me explain…
When choosing a home, new or used, buyers often look at an item’s short-term price (Purchase price). However, they should also consider its long-term price, which is its Total Cost Of Ownership.
What Is Total Cost of Ownership (TCO)?
TCO is the purchase price of an asset plus the costs of operation. Assessing the total cost of ownership means taking a bigger picture look at what the product is and what its value is over time. These long-term costs and expenses can be a better value in the long run and should be considered when placing a value on an item. Let’s break it down for new construction homes.
- MODERN FLOOR PLANS: The rooms in a brand-new home, especially bedrooms and bathrooms, tend to be larger with lots of natural light. This additional space can create a less stressful environment and the desire to stay home rather than go out to avoid a cramped space. For example, Homeowners are more likely to cook at home in a newer, more functional kitchen saving rather than eating out.
- ENERGY EFFICIENCY: New appliances and HVAC systems are more energy efficient. Builders generally add more efficient insulation and windows to create a less expensive home to heat and cool than older houses. All of that translates into lower utility bills.
- LOWER MAINTENANCE: A brand-new home requires less maintenance and upkeep since everything is new. Usually, materials and systems offer more modern advances over an older home, meaning you’re likely to spend less on maintenance and replacement.
- HOMEBUILDER WARRANTY: Brand-new homes have warranties to protect the components of your new home for years before you need any major repairs.
- NEW HOME COMMUNITIES: Buying a new construction home often means buying a lifestyle. Today’s communities often include more manageable homesites to avoid spending too much time and money on yard maintenance. Many communities include amenities like parks, pools and community spaces.
So, keep a close eye on those interest rate fluctuations, whether you’re just starting your home-buying journey or considering a refinance. They have the power to shape your financial landscape and determine the scope of your homeownership dreams.
