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Build or buy your new home?

Important considerations when sitting down to plan your next property

The idea of building a custom home that meets your family's precise needs — one that perfectly reflects your taste and personality — can be incredibly alluring. Everything is all shiny and new. No surprise maintenance issues or unexpected repair costs. These benefits, in and of themselves, may prove enough justification to move ahead on a custom build for some.

Others may be more attracted by the allure of an existing home in an established neighborhood — preferring the relative comfort, ease and predictability of buying and potentially modifying or updating versus the time and effort it would take to build their dream home.

However, the number of available homes remains just a little more than half (56%) of the inventory a decade ago.1 Not surprisingly, this ongoing lack of supply keeps values high and drives increased competition, as witnessed in the unusually high percentage of all-cash deals. According to year-end sales data published by Redfin, the share of all-cash home purchases climbed to nearly 31% in 2024.2

Key considerations for your decision

The decision to build or buy is complex, with each approach presenting its own set of challenges, advantages and drawbacks. Here are five critical factors to evaluate when making your choice:

Making your decision

Determining which approach is right for you and your family will ultimately be a personal and subjective choice guided by your specific circumstances, priorities and financial situation. A decision of this magnitude can significantly alter your overall financial picture, so it's essential that you consult not only with builders, architects, and real estate professionals but also with your advisor, who can provide access to a Bank of America home loan specialist, and tax professional who can provide additional insights tailored to your specific needs and circumstances.

Topics to discuss with your advisor

Consider these questions as you evaluate your options:

How much time are you willing and able to commit to the undertaking?

How flexible or exacting are your expectations and requirements?

Are there specific factors (such as a growth in family size, moving closer to family or friends, a career move or retirement) driving the decision as to where and when you plan to move?

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