The housing market is seeing mixed signals for new construction. Homebuilding is up 6%, but building permits are down by 5%.

The good news is that new homes are being built now. The decline in permits means that a number of things are preventing new homes from being built in the future. Land prospects, the labor market, and supply chain issues make it hard to predict if now is a good time for building a new home.

If you’re one of the lucky ones to get the best piece of land, or you’re thinking about a custom home build, you have a lot to consider.

Read on to learn what you need to know about building a new home.

1. Building vs. Buying

The big question is whether or not you’ll be better off building or buying your home. It depends on how long you plan to stay in your home.

If you’re there for the long-term, a custom home build is right for you. If you’re fine with an existing home and don’t care much about customizations, you should buy a home.

New home costs are pretty comparable to existing builds. The value of real estate is high right now, making a new home build an option.

2. Your Schedule Isn’t Set in Stone

If there’s one certainty in new construction projects, it’s that something will go wrong. You have a timeline for your custom home, but it’s not set in stone.

Think of it more as a guideline. There will be delays, especially now because of supply chain issues. Don’t be surprised if the project takes much longer than anticipated.

Plan ahead to make sure you have someplace to sleep. You also want to work with your builder to get the project as close to the schedule as possible.

3. Finish the Job Before Moving In

Owning a home can be like a never-ending stream of projects. You’re building a home to enjoy it now. If you wanted to work on home projects constantly, you’d buy a fixer-upper.

Make sure the job is completed before you move in. Don’t think that those minor projects will get done after moving in. It’ll be easier to push them aside and have fun.

4. Don’t Overdesign Your Custom Home Build

The great thing about building a new home is that you can customize it to your specifications. You create the perfect home for you.

However, if you plan to sell the custom build, you’re going to have to find a clone to buy it. There’s a fine line between adding desirable features and over-customizing.

Think about the features that you want to have in the home. Compare that with features that home buyers are looking for.

5. Plan With a Vision

How do you see your life in the next 5-10 years? Will you have a large family? Will your kids be away at college?

Design your house for the present and the future. You should have a very specific idea as to how you want your home to be when you move in and years from now.

You might decide to repurpose rooms and make other changes to adapt to your needs.

6. Have a Contingency Budget

You learned that your schedule should be treated as a guideline. You can’t do the same with your new home build budget.

What you can do is plan ahead. Assume that something will happen that causes the project to go over budget. This gives you the flexibility to adapt and not stress about money.

Most construction projects allocate 10%-15% to contingencies. If you do have a perfect construction, then you come in under budget.

You should also expect to pay for things out of your own pocket. You might decide to take on a small project that requires many runs to the hardware store.

Don’t use loan funds for these purchases, just pay with your own money. This should get added to your budget as well.

7. Check the Location Before Building

Is your plan to buy land and build on it? Check with your city first before buying a lot.

Look at the 20-year plan for the city or municipality. See if zoning laws will change. You want to avoid buying land for a great view, only to have a high-rise building go up 5 years later.

 See how the neighborhood will change or if new roads are planned nearby. You could have a great location if there are plans to build a mass transit line within walking distance.

That could raise your property values before you even break ground.

8. Carefully Vet Contractors

Be sure to hire experienced custom home builders that know what they’re doing. Building a new home is stressful, especially when things don’t go as planned.

You want to have a team of professionals who can guide you through the process and help you manage the challenges.

Get recommendations from friends and look online for builders in your area. Check out online reviews and testimonials.

Make sure they’re licensed and insured. You want to know more about how they work and manage the construction project. For instance, do they prefer to work with their own electrical contractors and plumbers, or are they open to suggestions?

Be sure to ask if the contractor needs you to do anything. You should get clear on those expectations from the outset.

Building a New Home for Your Future

Building a new home can be such a great project to take on. It’s also not for the faint of heart. Things can easily go wrong if you don’t know what to expect.

Consider the pros and cons of building vs buying. Make sure you hire incredible contractors to manage the project and plan for challenges along the way.

It’s a juggling act, but if you have a sense of adventure, you’ll end up in the home of your dreams.

For more great home tips, be sure to visit the blog for more helpful articles.