There are some persuasive arguments for choosing a rebuild over a remodel when it comes to navigating home upgrades
Homeowners often find themselves at a crossroads when it comes to updating where they live. The choice between buying a new home, rebuilding an existing one or remodeling can be a tough financial, and sometimes emotional, decision. In today’s market, finding and affording a new home has become harder and more costly than in previous years. So, the choice becomes if you need more space or upgrades, do you remodel or rebuild? While remodeling might be the best option in some situations, there are compelling reasons why tearing down the home and starting over is a superior choice for many.
According to Bloomberg, we are currently in the least affordable housing market since the 1980s. In addition to rising interest rates, people who snagged a low interest rate during the last few years are not selling, resulting in low inventory. This lack of homes for sale makes rebuilding an existing home a great option, especially for those who want a lot more space, modern updates, and love where they live.
Many older homes have outdated electrical, plumbing, or HVAC systems that are costly and challenging to upgrade. Also, building codes and regulations change over time. Rebuilding the entire home lets owners incorporate modern, energy-efficient technologies, create a more efficient infrastructure, and brings the home up to code with safety standards and regulations.
Thomas James Homes (TJH), the nation’s largest replacement homebuilder, has more than 500 homes in production across Southern California, Northern California, the Pacific Northwest, Colorado, and Arizona. With TJH’s BUILD division, the company helps homeowners build a new home on their existing homesite with an owner-focused approach.
“With BUILD, homeowners are able to tear down their old house and rebuild a new, modern home on their existing homesite without the stress normally associated with custom building. We help homeowners choose a plan and select a style. Plus, we take care of everything, from pulling permits to coordinating with architects and designers to installing finishes,” said Brian Reid, Chief Sales and Marketing Officer for Thomas James Homes on behalf of the business.
One concern in this financial climate when considering rebuilding is the cost, and the rising interest rates. People often think that renovating will be less expensive in the long run as they think the interest rates for rebuilding their home will change and increase as the project goes on.
This is not the case, as most builders provide their clients with preferred lenders who use a one-time close, construction-to-permanent loan to lock in the rate. Similar to a fixed-rate mortgage, the interest rate is determined and set when the loan is closed, and it will remain the same when the loan converts to a traditional mortgage. 
In addition, homeowners can receive lending based on the future appraised value of the home after it is built. The lender will then pay off your previous mortgage, and the new funding will go toward the building process. This eliminates having a second mortgage and could offer more flexibility and potentially lower payments. Also, with this structure, when the cost of building materials goes up, your price doesn’t.
With most homebuilders, the base price of your build is guaranteed and locked in when you sign your contract. Even if the cost of materials or lumber increases during construction, your budget stays the same.
Another factor surrounding the decision to rebuild is energy costs, which continue to rise. To create a truly energy-efficient home that is up to code, the owner typically needs to rebuild and not remodel. This is especially true if the home is more than 50 years old, because building practices have evolved, and often the structure of older homes can’t accommodate the newer systems.
When rebuilding, homebuilders can install air barriers, insulated siding, spray foam insulation, advanced sealed ducts and they can use high-efficiency HVAC systems and high-performance windows. Plus, the new roofs are built to accommodate solar panels, offering owners a new source of electricity.
Also, as technology advances, smart home devices can play a big role in creating a more energy-efficient home. For example, Wi-Fi enabled smart thermostats learn preferences and create custom heating and cooling schedules based on habits, ensuring energy is used efficiently.
Building a new home can be both exciting and overwhelming, but aligning yourself with a trusted partner can help. Asking the right questions can help ensure the result is a beautiful new home that meets your needs, is energy efficient and is a smart investment.
Thomas James Homes
Headquartered in Aliso Viejo, California, Thomas James Homes (TJH) is the leading single-lot replacement homebuilder unlocking access to new homes in the coolest neighborhoods. TJH has more than 500 homes in production across Southern California, Northern California, the Pacific Northwest, Colorado, and Arizona. Delivering design-driven homes in communities within major metro areas where new construction is rare and in demand, TJH’s customer-centric solutions include options to build a new home on an existing homesite, personalize a pre-construction home, or buy a completed home curated by in-house design experts.