Buying an Energy-Efficient Home: A Financially Bright Idea

Whether you give a hoot about the environment or not, it could pay to think about energy efficiency when shopping for a home.

Newer houses certified by Energy Star — the federal government’s energy-efficiency rating program — use an average of 20% less energy than homes built to the 2009 International Energy Conservation Code, according to the U.S. Environmental Protection Agency, which oversees the system.

But using less energy is just the beginning. Green certification programs like the National Green Building Standard (NGBS) or Leadership in Energy & Environmental Design (LEED) go even further, with strict standards for indoor air quality, greenhouse gas emissions and water conservation, among other things.

Although energy conservation might not sound as exciting as a luxury bathroom or backyard patio, improving health and comfort while reducing energy bills could help turn your house into a true dream home.

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Benefits of an energy-efficient home

Thirty percent of homeowners say their monthly housing costs, including utilities, are expensive, according to a 2018 NerdWallet study. The cost to heat, cool and illuminate an entire house can be especially shocking for first-time home buyers who may be more accustomed to fewer square feet.

Buying a home that’s built to conserve resources can help you avoid those breathtaking bills, but it may require a slightly bigger mortgage.

Energy Star homes cost around $2,500 more to build on average, the EPA told NerdWallet in an email. And LEED certification can add an extra 2.4% to the total cost of building a home, on average.

Home buyers can recoup the added investment in several ways, however. In addition to lowering utility bills, energy-efficient homes often sell faster and at a higher price than noncertified homes, studies have shown.

If you buy a certified efficient house, it could give you an advantage should you ever sell. Energy-efficient homes bring in around $5,000 more than standard homes, a 2019 National Association of Home Builders study concluded.

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