Most Americans Have Regrets About Buying a New Construction Home (2022 Data)

Published April 4, 2022

Written by Patrick Duffy

2021 was the busiest year for both new housing starts and existing home sales since 2006, putting additional pressure on the nation’s home builders to pick up the pace without sacrificing quality.

In 2022, home buyers face myriad stressors — from extreme competition to limited supply to rising mortgage rates. For many, a new construction home may be an attractive option: the opportunity to fully customize a home, without having to beat other buyers to the closing table.

To learn whether new construction homes are a welcome solution to a hyper-competitive housing market — or a risky endeavor buyers later regret — we surveyed 1,000 Americans who purchased a new construction home or were in the process of building one.

Read on to discover what home buyers regret the most about their home-building experience — and how the pandemic is reshaping the home construction industry.

New Home Construction Statistics 🏗️ 🏡

66% of buyers feel some form of regret about the home-building process — including 26% who wish they had purchased an existing home instead.
59% of people who built a new home felt stressed, anxious, or frustrated during the construction process.
Home buyers’ top regrets about the home-building process include conflict over decision-making (36%), premature maintenance (36%), and overstretched budgets (35%).
Only 48% of people who bought a new construction home say doing so is actually a good investment.
Despite the challenges associated with new home construction, 64% of respondents would buy a newly built home again.
32% would not recommend their builders or contractors to others — including 11% who would turn down a financial incentive for referrals and 9% who wouldn’t recommend their builder under any circumstance.
85% of new construction buyers experience some type of delay, with 50% waiting three months longer or more for their homes to be completed. More than one-third of buyers (35%) experienced delays that exceeded six months.
92% of new construction buyers say the process was more expensive than they anticipated.
- 40% of people who built a new home during the COVID era of soaring inflation report cost increases for basic building materials.
88% of new home buyers wish they made different decisions during the construction process, including 39% who wish they spent more on luxury upgrades — outweighing the 30% who wish they spent less on finishes.
“Buyer beware” still applies to newly built homes, with 65% of buyers uncovering issues during their home inspections.
Frustratingly, 89% of buyers deal with premature repairs or maintenance after moving into their brand-new homes, including problems with major systems such as security systems (37%), plumbing (36%), and electrical systems (36%).
- During the COVID era, issues with premature maintenance have increased in nearly every category, particularly electrical systems (41%) and HVAC (38%).

The Majority of New Construction Buyers Have Regrets

It’s easy to understand why home buyers get caught up in the excitement of purchasing a brand-new, custom-built home. Yet two-thirds of new construction buyers (66%) admit they have regrets about their home purchase.

The intensity of these regrets varies among buyers, who:

Wish they purchased an existing home instead (26%)
Have minor regrets about their home (21%)
Wish they made different decisions while building their home (19%)

Nearly 3 in 5 buyers (59%) experienced negative emotions during the home-building process, including stress (32%), anxiety (30%), and frustration (26%).

Buyers’ Biggest Regrets Include Interpersonal Conflict, Delays, and Build Quality

Building a new home requires dozens of decisions — so it’s no surprise that more than one-third of buyers (36%) regret that the home-building process sparked conflict with their family or partner.

Beyond arguments over carpet and tile, the majority of regrets are directed at home builders and contractors, including:

Premature maintenance (36%)
Construction delays (35%)
Builder or contractor cutting corners (35%)
Rising costs of building materials, labor, and other expenses (35%)
Overstretched construction budget (35%)
Poor construction quality (31%)
Poor communication (30%)

Among buyers who built a home during the pandemic, 40% complain that construction took too long — up from 35% in pre-pandemic times

Under Half of People Who Purchased a New Construction Home Think It’s Actually a Good Investment

Just 48% of home buyers who purchased a new construction home say new construction is actually a good investment.

Nearly one-quarter of respondents (22%) believe new construction isn’t a good investment, and 30% feel a pre-owned home is a better investment.

In the past, the premium for buying a new single-family home could cost up to 30% more than an existing home — but that gap has narrowed dramatically during the COVID era.

By December 2021, competitive market conditions drove the median sale price for a newly built home to $377,700 — just 3.7% more than the median price for existing homes on the market of $364,300.

Interestingly, 49% of the new construction buyers we surveyed worked with a real estate agent during the purchasing process. This suggests agents may be missing an opportunity to educate or advise their clients on the implications of buying a new construction home.

Despite Regrets and Negative Experiences, Most Buyers Would Buy New Construction Again

It may seem surprising that despite numerous regrets and stress, almost two-thirds of buyers (64%) would purchase a new construction home again.

More than one-third of homeowners who purchased new construction (37%) simply prefer new construction over existing homes — but for others, the benefits simply outweigh the stresses.

An identical share of our respondents (37%) say the opportunity to have total control over their homes’ design and features is too attractive to pass up.

Other top reasons buyers favored a newly built home include:

Enjoying the home-building process (33%)
The opportunity to buy land in a good location (33%)
A more affordable home than existing homes in an area (32%)
A smart home with the latest technology (31%)
An eco-friendly home with the latest green-building practices (31%)
Builders’ financing and upgrade incentives (30%)
Avoiding a bidding war (28%)
Finding a solution for shortages of existing homes on the market (23%)

Nearly 1 in 3 Buyers Wouldn’t Recommend Their Builder

Almost one-third of new home buyers (32%) would not recommend their builder to friends or family — and 11% would even turn down a financial incentive to refer their builder.

About 1 in 10 buyers (9%) wouldn’t recommend their builder under any circumstance.

It’s common for home builders to offer financial incentives to clients who refer their family and friends, and 31% of our respondents would be willing to participate.

Just 24% of new home buyers would refer family or friends to their builder without the promise of an incentive.

Delayed Construction Schedules Aren’t Exclusive to the COVID Era

When the pandemic disrupted the global supply chain, the impact rippled into real estate — particularly for homebound homeowners taking on remodeling projects and remote workers relocating from major cities to suburbs and rural areas.

Yet these delays aren’t exclusive to the pandemic era. In fact, we found no significant difference between pre- and post-pandemic delays. Overall, nearly 9 in 10 buyers (85%) experienced delays during the construction process.

Half of new home buyers (50%) waited more than three additional months for construction to conclude — including more than one-third (35%) who experienced delays that exceeded six months.

Among all new home buyers we surveyed, COVID-19 caused delays in the home-building process for 37% of respondents.

Other common issues, both before and during the pandemic, include:

Shortages of building materials (35%)
Struggles with making decisions such as finishes or the home’s layout (35%)
Issues communicating with the builder (34%)
Weather (33%)
Problems obtaining building permits (32%)
Issues with the buyer’s financing (30%)
Issues with the builder’s financing (30%)
Issues with the builder’s project management (28%)

Since the pandemic began, 41% of new construction buyers say the pandemic’s labor shortages and supply chain issues are to blame for delays.

Otherwise, roughly the same issues caused delays both before and during the pandemic.

COVID-Era Inflation Is Eating Away at Home-Building Budgets

As inflation hits a nearly 40-year high, soaring costs are a major source of frustration for Americans with tight home-building budgets.

The vast majority of new construction buyers (92%), though, say the process was more expensive than they anticipated — no matter when they built their home.

Among the home buyers we surveyed, the inflated costs that caught them by surprise include:

Building materials (e.g., lumber, drywall, concrete, etc.) (37%)
Finishing materials (e.g., flooring, cabinets, doors, appliances, etc.) (35%)
Furnishings and decorations (35%)
Surveying and/or clearing land (32%)
Labor costs (32%)
Building permits (32%)
Purchasing a lot (32%)
Landscaping (31%)

In addition, a sharp jump in mortgage rates that’s expected to continue climbing may force some buyers to scale down their ambitions for their dream location, square footage, or design upgrades.

Despite Higher Costs, Many Buyers Wish They Spent More on Luxury Finishes

The ability to choose every detail of your home is a weighty responsibility — and 88% of new construction buyers wish they’d made different decisions while building their home.

Among these home buyers, 39% wish they’d splurged on higher-quality finishes — outweighing the 30% who wish they’d spent less on finishes.

Other common regrets include longing for:

More or differently placed electrical outlets (39%)
A different floor plan (35%)
Larger square footage (35%)
A different builder (34%)
A different location (30%)
Smaller square footage (26%)

Home Inspections Reveal Problems for Nearly Two-Thirds of New Construction Homes

Although it’s very common for buyers of existing homes to hire their own inspector before closing, it’s rarer with new construction. In fact, about 1 in 7 new home buyers (14%) did not complete an inspection. But that might be a mistake.

Among new home buyers who opted for an inspection, nearly two-thirds (65%) uncovered issues with their newly constructed homes.

These issues ranged from minor problems that did not delay the closing (32%) to failed inspections that ruined move-in plans (24%).

The Most Common Inspection Problems Include HVAC and Safety-Related Issues

With builders, subcontractors, and vendors operating at full capacity racing to meet deadlines, it shouldn’t be too surprising to learn that some details are missed during the home-building process.

What is surprising, though, is that these missed details often include some crucial home components, including heating, ventilation, and air conditioning (HVAC) systems (38%) and safety-related issues such as rickety banisters and loose wiring (36%).

Other common problems new home buyers uncovered during their inspections include:

Problems with finishes (e.g., smudged paint, nicked flooring, etc.) (35%)
Drainage issues (33%)
Structural problems (32%)
Leaks or water damage (32%)
Foundation problems (31%)
Drafty doors and/or windows (31%)
Roof problems (31%)
Non-functioning electrical outlets (25%)

Premature Maintenance and Repairs to New Construction Homes Are More Common During COVID

Nearly 9 in 10 newly built homes (89%) require premature maintenance measures — despite the fact that they’ve never been lived in.

During the COVID era, shortages of building materials and skilled labor have intensified these issues — causing an uptick in premature maintenance in nearly every category.

Among home buyers who faced premature repairs or maintenance on pandemic-era builds, the most common problems include:

Electrical systems (41%)
Security system (40%)
Heating/air conditioning (38%)
Plumbing (37%)
Flooring (35%)
Smart home features (35%)
Foundation (35%)
Drywall (34%)
Roof (32%)
Landscaping (24%)

Methodology

The proprietary data featured in this study comes from an online survey commissioned by Real Estate Witch. 1,000 people who built or purchased a new construction home were surveyed Jan. 12-14, 2022. Each respondent answered up to 21 questions related to their experience building and buying a home.

About Real Estate Witch

You shouldn’t need a crystal ball or magical powers to understand real estate. Since 2016, Real Estate Witch has demystified real estate through in-depth guides, honest company reviews, and data-driven research. In 2020, Real Estate Witch was acquired by Clever Real Estate, a free agent-matching service that has helped consumers save more than $82 million on realtor fees. Real Estate Witch’s research has been featured in CNBC, Yahoo! Finance, Chicago Tribune, Black Enterprise, and more.

When do you close on a new construction home?

The closing date for a newly built home depends on when construction concludes — but 85% of new construction buyers experience some type of delay. In fact, more than one-third of new home buyers (35%) experienced delays that exceeded six months.

Is new construction a good investment?

Yes, new construction homes are generally considered a good investment with strong resale value. Yet in a survey of 1,000 Americans, just 48% of new construction buyers believe their investment will actually pay off.

Do I need a realtor to buy a new construction home?

You don't need a realtor to purchase a new construction home — but in a survey of 1,000 Americans, 49% chose to work with a buyer's agent anyway.

More Research From Real Estate Witch

How Long Does it Take to Build a House? On average, it takes 6.8 months to build a house — but will location, build type, and resource availability all impact your timeline? Learn how to plan for your future home.

Do I Need A Real Estate Agent? You don’t need a real estate agent to buy or sell a home — but the potential benefits are significant. Read our guide to figure out how a real estate agent might help with your next transaction.

Most Popular Posts

Redfin vs. Realtor: What Do You Really Get?: Explore the benefits of Redfin vs. traditional realtors, and the pros and cons of each, to find the best option for your next home sale.

Negotiating Realtor Fees: 5 Tips to Lower Commission: Negotiating real estate fees centers on knowing the market and your situation, then using that info while talking to multiple agents.

Realtor Fees: Who Pays the Commission and How Much Is It?: Wondering how much realtor fees cost? This guide explains what you’ll pay (and how to get discounts) when working with a realtor.

How To Sell Your House Without A Realtor: Want to sell your house without a realtor? This guide outlines steps to selling without a realtor, pros and cons, and costs.

The Best 1% Commission Realtors + Brokerages: From Clever to Redfin, we review the top 1% real estate commission companies. Learn how they work and find the best low commission company for you!