The housing boom of the last decade has ended with prices of existing homes falling anywhere from 19% to 30% since 2006. So it is certainly a legitimate question to wonder whether it is best to buy an existing home or to build that dream custom home. From a purely economic standpoint, the answer is undeniably "buy an existing home." First there are currently so many homes on the market that buyers are in a strong position to negotiate a favorable price and convenient terms. And second interest rates are low. Conventional thirty-year fixed mortgages are still hovering around the 5% range. These two factors make buying an existing home the more preferred choice economically, and it also makes this an excellent time to buy. It is not common to have both home prices low and interest rates low at the same time. The more common scenario is to have home prices drop as interest rates rise, or conversely, see home prices rise as interest rates drop. Home prices should remain depressed for a while, but interest rates are sure to begin to rise and are already showing some signs of creeping upward.

However, the answer as to whether to custom build or to buy is not always based purely on economics. If you have your heart set on building your dream home in your dream location and you have the time, patience and budget to support the project, then custom building would be the better decision. You will need to find a reputable builder who you can trust and work with from design to completion. The cost will be more than if you had bought that resale, but the house will be uniquely yours and you will have turned that dream into a reality.