Is Now the Right Time to Buy a Home in Colorado Springs? Smart Buy vs Build Strategies & Rate-Savvy Solutions

Is Buying or Building a Home Cheaper Right Now? (2025 Update)

When people ask whether it’s cheaper to build or buy, the answer depends heavily on the market you’re in, and 2025’s numbers make it easier to see the trade-offs.

Nationally, the average cost to build a home this year falls between $323,000 and $531,000 before adding land costs, according to HomeAdvisor and Bankrate. Once you factor in land, utilities, design upgrades, and permitting, the total can rise well above $600,000. The U.S. Census Bureau’s builder survey for early 2025 puts the all-in cost of a new construction home at roughly $665,298. For perspective, the average sale price for a newly built home in February 2025 was $439,000, which reflects what buyers are actually paying, not the builder’s full expense.

Buying an existing home still tends to be less expensive. National averages for resale homes hover between $410,000 and $536,000, and you avoid many of the up-front infrastructure costs that come with raw land construction. Of course, those savings come with trade-offs in customization and energy-efficiency features.

In Colorado Springs, the pattern is similar but with a local twist. The average single-family home sells for about $574,276. Building in the region can start in the $400,000s for a modest home on an already-owned lot. There is also a healthy supply of single-family homes between $500,000 and $600,000, especially if you are not pursuing top-tier upgrades or luxury finishes. Buyers who add land purchases and high-end customization will see totals climb higher, but for those keeping upgrades modest, the numbers can remain competitive with the resale market.

Bottom line: In 2025, building usually costs more up front than buying in Colorado Springs, just as it does nationally. That gap can shrink or even flip if you secure large builder credits, favorable lot pricing, or financing tools like a VA loan assumption. The most strategic buyers are not simply asking “build or buy?” but “which path gives me the best total value after incentives and financing strategies are factored in?”

Why “Marry the House, Date the Rate” Can Cause More Stress

You’ve probably heard the phrase from a well-meaning mortgage broker: “Marry the house, but date the rate.” The idea is to buy now and refinance later when rates drop. The problem is there is no guarantee rates will drop. In the meantime, you are locked into a higher payment with no timeline for relief.

Buying a home is one of life’s biggest financial commitments. Building uncertainty into your financing plan can add unnecessary pressure. A better approach is to focus on strategies that lower your payment today so you can buy with clarity and confidence.

Strategy #1 – Lender Rate Buydown

One of the most effective ways to improve affordability in today’s market is a lender rate buydown. This is when you or another party, often the seller or the lender, pays an upfront cost to lower your interest rate. It can be temporary, like a 2-1 buydown where the rate is reduced for the first two years, or permanent, which keeps the rate lower for the life of the loan.

On a $574,276 home, a one-point rate drop could mean hundreds in monthly savings. That is money you can put to work immediately instead of waiting for the possibility of a future refinance.

In Colorado Springs, many sellers are open to contributing to a buydown to help a sale move faster. Pair that with a lender offering in-house credits, especially for VA or FHA buyers, and the savings can be significant.

Connect with a trusted mortgage broker and explore buydown options.

Strategy #2 – FHA & VA Loan Assumptions

If you qualify for an FHA or VA loan, you may be able to assume the seller’s existing loan and take over their rate and terms. This is one of the most overlooked tools in the market.

For VA buyers, the benefits can be dramatic. If approved, the VA funding fee (the way that the Department of Veterans Affairs guarantees the loan) is only 0.5% compared to the usual 2.15% to 3.3%. On an average Colorado Springs home, that is about $2,800 in fees instead of roughly $19,000. That difference impacts both your upfront costs and your monthly budget.

Even if the rate you assume is only slightly better than current market rates, avoiding tens of thousands in fees can make this strategy worth serious consideration.

Strategy #3 – New Construction Incentives

New homes are not just about modern finishes. They are one of the few areas in real estate where buyers can secure large financial incentives.

In Colorado Springs, some builders are offering up to 9% of the purchase price in credits. On a $574,000 home, that is more than $50,000 to apply toward a rate buydown, closing costs, upgraded finishes, or paying down debt to improve your debt-to-income ratio.

Many of these incentives require using the builder’s preferred lender. This is often how builders can exceed normal concession limits, since they pre-purchase funds for these offers. The result can be a far more affordable new home than it appears at first glance.

Search New Construction Homes now.

Bringing It All Together

The best buyers in Colorado Springs are looking at all three options. They compare the cost of building versus buying, factor in the immediate relief a buydown can bring, and calculate the savings from an assumable loan or builder credit package. With the right combination, you can shift the math in your favor and buy with confidence.

The most successful buyers in Colorado Springs right now are:

• Comparing the cost of building versus buying using current market data.

• Factoring in the immediate monthly savings from a lender rate buydown.

• Looking for FHA or VA loan assumptions that reduce both interest rates and fees.

• Exploring new construction incentives that can cover closing costs, upgrades, or buy down their rate.

When you evaluate these side-by-side, it becomes clear which path delivers the best value for your situation. You do not have to guess, and you do not have to wait for rates to change before making a move.

Ready to run the numbers and see which strategy works best for you?
Click here to connect with me and get started — I’ll walk you through every option so you can make a confident decision in today’s market.

FAQs

1. Is building a home cheaper than buying in Colorado Springs?
   Not typically. Building may exceed $600,000 when factoring in land and upgrades, while the average resale price is $574,276.

2. What is a mortgage rate buydown and how can sellers contribute?
   A buydown lowers your rate by paying upfront points. Sellers can provide credits toward this cost.

3. Can I assume someone else’s FHA or VA loan?
   Yes, if you qualify and the loan servicer approves, you can take over their existing mortgage.

4. How much does a VA funding fee cost when assuming a loan?
   Only 0.5% for qualified buyers, compared to the usual 2.15%–3.3%.

5. What incentives do builders offer on move-in ready homes?
   Incentives can be as high as 9% of the purchase price and applied toward rate buydowns, closing costs, upgrades, or debt payoff.

6. Should I wait for mortgage rates to drop or buy now?
   Rates may or may not drop. Using tools like buydowns, assumptions, and incentives can make buying affordable now.