Fixer-Upper vs New Construction in 2025 | Montgomery Alabama Real Estate

For the first time in years, existing homes—yes, the older ones that often need updates—are selling for more than brand-new construction.

According to the latest numbers, the median price of an existing home is $429,400. For a newly built home? $410,800.

That’s an $18,600 difference.

If you’ve been eyeing a resale home thinking it’s the “cheaper” option, you might want to look again. Especially in competitive markets like Montgomery Alabama, this shift matters.

Let’s break down what’s going on, why it matters, and what it means if you’re thinking about buying a home in 2025.

The Numbers Say It All

It used to be that brand-new homes were priced well above resales. From 2010 to 2019, the average gap between new and existing homes was about $66,000. Over the past five years, that gap narrowed to around $25,000 on average.

Things first flipped in Q2 and Q3 of 2024, when the median price of existing homes surpassed new homes for the first time. Now, in 2025, that trend is holding strong.

• New home prices decreased 0.9% year-over-year

• Existing home prices increased 1.7% over the past year

These housing market trends are reshaping how buyers approach their options—and why many are now questioning the value of fixer-upper costs.

The Real Cost of a Fixer-Upper

Renovation projects aren’t what they used to be, and buyers looking at Montgomery Alabama homes for sale should tread carefully. Opting for a fixer-upper may seem cost-effective, but hidden expenses can stack up fast.

Here’s why:

• Materials and labor costs remain high. While inflation has cooled, renovation prices are still elevated. Lumber, roofing, and skilled labor all carry premium price tags.

• Contractor delays and backlogs are common. Many homeowners wait weeks or months just to get an estimate.

• Surprise expenses are likely. From outdated systems to hidden water damage, older homes often conceal costly issues.

• Time equals money. Renovations take time, and so do temporary housing or extended mortgage overlaps.

Bottom line: buying a home in 2025 that requires major updates may cost more than new construction homes 2025 offers.

Why New Construction Is Suddenly the Better Deal

Builders are adapting. Across the country—and in places like Montgomery Alabama—developers are constructing smarter, more affordable homes.

They’re:

• Building smaller homes with efficient layouts

• Choosing affordable land in growing areas

• Offering buyer incentives like interest rate buydowns, closing cost assistance, and upgrade packages

Because builders operate at scale, they can offer these perks while keeping prices competitive. The result? New construction is looking better than ever.

When a Fixer-Upper Might Still Be Worth It

To be fair, there are still valid reasons to consider a fixer-upper, especially if you’re working with a trusted local expert like Britt Dowling Montgomery Alabama REALTOR.

Scenarios where it may make sense:

• You’re buying well below market value and have done a full cost analysis

• You have the budget, skills, and patience for renovations

• You want a specific location where new builds aren’t available

• You plan a custom remodel and want full design control

What This Means for You

In today’s real estate market, don’t assume older equals cheaper. That’s no longer true.

You could end up spending more on an older home that needs work than you would on a move-in ready, energy-efficient new construction. And in a market where every dollar counts, that matters.

Before making a decision, consider all your options—especially if you're browsing Montgomery Alabama real estate. Compare renovation vs new build costs carefully. Take a close look at builder incentives. And talk to a knowledgeable REALTOR like Britt Dowling who understands the local dynamics.

You might be surprised at what’s possible in 2025.