Building vs. Buying: Navigating Home Ownership in New Mexico

Embarking on the journey of home ownership in the Land of Enchantment State, New Mexico, is a substantial investment both in terms of finances and time. Deciding between building a new house or buying an existing one comes with its own set of considerations. In this guide, we’ll delve into the costs, timeframes, and financing options to help you make an informed decision.

Average Cost to Build a House in New Mexico

The average cost per square foot to build a house in New Mexico is approximately $145. However, this figure doesn’t encompass land expenses, permit fees, excavations, and other associated costs. The overall building costs in New Mexico range between $240,000 to $300,000, with the state average resting at $290,940.

For instance, constructing a 2,500 sq. ft. house in New Mexico would entail:

• Material Cost: Roughly $147,500, constituting 50% of the overall budget.
• Contractor(s) Charges: Typically between 10% to 20% of the total construction value.
• Electrical Costs: Approximately $7,500 to $12,500, covering both rough-in and finishing work.
• Roof Installation Costs: Varies from $3,200 to $36,100 based on material choice.
• Plumbing Costs: Around $12,000, encompassing fixture installation.
• HVAC Installation Costs: Ranging from $1,500 to $12,500 depending on system type and size.

Soft Costs in Home Construction

Soft costs include expenses that directly contribute to the building process. In New Mexico, these include:

• Land Cost: Averaging around $4,000 per acre.
• New Mexico Home Building Permit Costs: Approximately $5,000, contingent on various factors like construction type and area.
• Home Interiors: Budget at least $20,000 for furnishings, electronics, and essentials.
• Home Interior Designer Costs: Around $5,400 if you choose to hire a professional.

It’s worth noting that if you already own the land, building a house tends to be more cost-effective as you’ll only incur the construction expenses.

Financing Your Dream Home

For those seeking financial assistance, there are several home loan options available:

• Construction-to-Permanent Loan: This covers both land purchase and construction costs, converting into a conventional mortgage once the project is complete.
• Construction-only Loan: Meant solely for financing the building process, not land acquisition.

Alternatively, personal loans and home equity loans can be viable options for partial financing needs.

Conclusion: To Build or Buy?

Deciding between building and buying a home in New Mexico hinges on various factors, including land ownership, budget, and personal preferences. Building offers the advantage of customization, but it requires time and meticulous planning. On the other hand, purchasing an existing home may prove more cost-effective and time-efficient. It’s crucial to weigh these considerations carefully before taking the plunge into homeownership.