What Is the Return on New Versus Previously Owned Homes?

Buying into a new-home community may seem riskier than purchasing a house in an established neighborhood, but any increase in home value depends upon the same factors: quality of the neighborhood, growth in the local housing market and the state of the overall economy.

One survey by the National Association of Realtors shows that resale homes do have an edge over new homes. The trade group's figures show the median price of resale homes increased 3 percent between 1994 and 1995, compared to 0.8 percent for new homes in the same period.

While no one has a crystal ball with which to see into the future, your buyer agent should be able to use statistics to predict an approximate future value of any home you choose. This is based on historical information, assuming economic conditions remain the same.

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