What Is Rammed Earth Construction?

You may not be familiar with the term, but you’ve seen the building technique—think of the ancient architecture of the Great Wall of China, the Alhambra in Spain, and the stunning Kasbahs of Morocco.

These examples of rammed earth construction have stood the test of time, for several hundreds of years. And that durability is one reason this type of construction is making a comeback—albeit in buildings with significantly smaller square footage.

Rammed earth homes are sustainable and have a warm yet contemporary aesthetic to boot. Here’s what you need to know if you’re thinking about building or buying one of these unique homes.

What are rammed earth homes made of?

True to its name, builders use earth-based compacted soil to construct rammed earth homes. This earthy mix—which consists primarily of sand, silt, water, and clay—is set in formwork on the foundation.

“The rammed earth material is placed within the form in layers called lifts, typically 6 to 8 inches in depth, which are rammed with pneumatic tampers that can be maneuvered within the walls,” explains Bly Windstorm, CEO of Earth Dwell Ltd. and U.S. president of the nonprofit North American Rammed Earth Builders Association (NAREBA). “After a lift is fully compacted, another layer’s added and then rammed.”

Builders repeat this process until the wall is complete. All the building block essentials to complete the home are within each completed form. This includes reinforced steel, electrical and plumbing conduits, switch boxes, and even frames for doors.

The earth and aggregates available in the future home’s location determine the actual color of the walls. But if you want to put your stamp on Mother Nature’s offerings, you can alter rammed walls with various textures and finishes.

Types of rammed earth walls

The rammed earth buildings still standing today were constructed in areas where the earth’s soil had the optimum constituents for making durable walls. These “raw” types of rammed walls consist of sand, silt, water, and use clay as a binder, exactly like today’s walls.

However, it’s rare to find the optimum soil mix and the correct type of clay to make raw rammed-earth walls in the United States. And while, historically, clay has proven to be effective as a binder, the material isn’t earthquake-resistant, says Peter Jones, CEO of Gryphon Construction in Victoria, British Columbia, and Canadian president of the NAREBA.

As a result, new rammed-earth homes are mainly built with “stabilized,” reinforced rammed earth walls, to meet current building codes. So what makes the walls more stable?

“The addition of a Portland cement, lime, or other pozzolans [concrete improvers] allows the building of durable walls with local earthen materials in most localities around the world,” says Windstorm.

And the newer rammed earth formulas are more environmentally friendly, thanks to the additives like slag—a stony byproduct of melted or refined metal, which may remove harmful chemicals from the environment, says Jones.

Down-to-earth benefits of rammed earth construction

If you decide to build a rammed earth home, you won’t just be paying homage to one of the wonders of the world. You’ll enjoy these eco-friendly benefits as well:

Energy-efficient climate control: The aesthetics of these homes may evoke a stone-cold feel, but the opposite is true. Rammed earth walls are known for their high thermal mass, which means they absorb, store, and release heat, whether the house is in Alaska or Arizona.

“The house remains naturally cool in the summer and warm in the winter, with a small fraction of the energy required for a conventional home,” says Windstorm. Bonus: The walls are fireproof and provide sound insulation.

Environmental advantages: Rammed earth homes basically last forever, Jones says, “whereas conventional ‘stick-homes’ may last 80 years.”

Rammed earth walls don’t require painting or siding. And they are non-toxic, which means there’s better air quality within the home. 

Another green checkmark? Utilizing the earth’s soil for walls reduces the heavy load on our forests. And there’s not much chance of depleting earthen material.

“Even a small, 5-acre quarry could produce enough earthen material for over 1,000 homes,” adds Windstorm.

Minimal maintenance: There’s an endless to-do list of maintenance and repair costs with houses made out of wood. With rammed-earth homes, the upkeep is minimal.

Rammed earth walls are weather-resistant and only need a second coat of sealer 10 to 20 years after construction. The only significant housing components that might require attention at some point are the roof and windows.

Drawbacks to rammed earth homes

“The greatest downside is the higher cost of construction as compared to a stick-built home,” says Windstorm. The massive rammed earth walls—about 18-inches to 2 feet thick—are expensive to make, take longer to build, require special equipment and skilled labor to erect.

Gore Designs, a rammed earth builder, says that they could cost 30% to 70% more than a stick build. However, rammed-earth homeowners save in the long run, thanks to the lower energy costs and the fact that they need less upkeep.

Finally, there’s the commitment issue. It’s way more complicated to add an electrical outlet—let alone remodel a bathroom—when you have a rammed earth home, due to the thickness of the walls.

That means you have to put a lot of thought into designing a home that you can live in for many years to come.

Experts in Residential Real Estate in Orlando

If you are buying or selling real estate it’s quiet often the single most important financial decision you make. For the last 30 years we have helped clients buying and selling property in Orlando and the surrounding areas. Put simply, this means the knowledge and expertise accumulated over this time ensures our clients get the best representation possible.

Our experienced agents will help and guide you through the entire process providing valuable support every step of the way.

Many first-time homebuyers might shy away from the prospect of buying a brand-new home, assuming: It will cost too much. It will take too long.

While purchasing new construction is indeed different from purchasing previously owned property, many misconceptions abound about new builds. As a result, homebuyers who’ve heard these rumors might be passing over a smart path to homeownership that makes sense for many Americans today.

“Given declining housing affordability and limited existing home inventory, a full one-third of inventory on the market is now new-construction homes,” says Robert Dietz, senior vice president and chief economist for the National Association of Home Builders.

In other words, in a housing market plagued by limited inventory, prospective homebuyers can’t afford to count out new-construction homes as an option—and they certainly shouldn’t just because of some persistent misconceptions.

With that in mind, we’re here to set the record straight on some easily busted new-construction myths that just won’t quit.

1. New construction homes are more expensive

While new-construction homes might technically cost more upfront, that price tag is not the whole picture.

“It’s true, on the average, that new homes of similar sizes historically outprice pre-owned by about 16%,” says Stephen Haines, president of Artisan Built Communities. “But since homes don’t possess a clear odometer on them, like one would use to evaluate a used car, buyers need to consider all the costs of purchasing to understand their total cost of ownership.”

A new-construction home, after all, will sport a brand-new roof, appliances, HVAC equipment, and major systems that homebuyers likely won’t need to repair or replace anytime soon. In other words, while a new-construction home might have a sales price that seems more expensive upfront, it’s actually saving a buyer from having to replace, upgrade, or “bring to code” elements of a previously owned home, which could cost tens of thousands of dollars.

“Depending on the age of the pre-owned homes, one should understand the remaining life expectancy of these components,” says Haines. “One must look closer to total cost of ownership to understand the truth.”

2. You’ll be waiting a long time to move in

It’s true that new-construction homes do take time to be built—on average, about 6.5 months from the ground up.

However, this does not mean you’ll need to wait that long, since builders often start building long before they have a buyer. Construction on these “spec homes” might already be well underway or even completed before you strike a deal. So if you don’t want to wait at all, see if there is a spec available.

Yet it’s also worth keeping in mind that the build time will vary widely, particularly with recent supply chain issues that might lengthen the timeline. Factors that could affect construction time frames include the availability of labor and materials as well as municipality permitting times.

Bottom line: Make sure to ask when they expect the house to be done, and what happens if the house is not done on time.

3. It’s harder to finance a new-construction home

Actually, the exact opposite is true here. Thanks to potential builder incentives and lenders liking the fact that a person is buying something new (which translates to less risk), there might be more simplicity in financing a new home.

“Builders often maintain relationships, partnerships, or even wholly owned subsidiaries whose primary focus is to help borrowers find better lending options,” says Haines.

Plus, title companies that work with builders tend to do “batch” title searches on the new parcels in a community all at once. This helps an urgent buyer get to the closing table faster.

“If you are looking at a larger national builder, they will generally have affiliated lending companies or their own lending companies that willoffer you several incentives to do business with them instead of an outside lending source,” says Don Turner, national sales director of new homes at Realtor.com®.

If you happen to find a better deal with an outside lender, maybe someone you’ve been pre-approved through, most builder lenders will usually work to match or beat that deal to keep your business in-house so they can directly manage your mortgage file. And if you are working with a smaller builder that does not have an affiliated lender, the builder will typically work with a local mortgage broker to assist buyers in securing loans.

4. New homes lose their value faster than pre-existing properties

While it’s true that new cars lose a lot of their value the instant they’re driven off the lot, the exact opposite is the case with new homes. In fact, many new-construction homes appreciate in value even before their buyers have moved in.

“Most buyers who buy in the early stages of construction in a community can expect to build equity even before they closeon their home, because of price increases as the builder sells more homes,” says Kimberly Mackey, founder of New Homes Solutions and a sales and marketing management consultant specializing in residential homebuilding. There is generally also another spike in value once the entire community is completed.

5. You can’t inspect a new-construction home before you buy it

You can absolutely do a home inspection before you purchase a new construction.

“I would be cautious of any builder who refuses to allow you to perform a home inspection,” says Bill Samuel, owner of Blue Ladder Development.

In fact, buyers who choose to purchase a new-construction home can actually periodically inspect the home throughout the build, giving them and their inspector a much higher understanding of the home’s condition; plumbing, electrical, and HVAC systems behind the walls; insulation; and more than they obtain by inspecting only a completed home.

“I would also encourage buyers to try and perform an inspection before the builder starts drywalling the house,” says Samuel. “Having the inspector walk through the home before the drywall is installed allows him to see many important parts of the home that will be covered up.”

New-construction homes are also inspected by local municipalities throughout the construction process, and those same groups provide a final certificate of occupancy before move-in is allowed.

Homebuyers also are provided an opportunity to conduct a walk-through of their home before taking possession of it. All in all, there are plenty of opportunities to kick the tires on a new house.

6. New-construction homes are lacking in character

Beauty is in the eye of the beholder. It’s the same thing with what someone defines as character. And just because something is new, it doesn’t mean it can’t have every feature you’ve ever dreamed of in a house.

“A person can choose or add different features for whatever they can afford to buy or add on,” says federal construction and security contractor Charles Chadwick Jr. “I’ve seen homes in subdivisions where some had vinyl siding only, and others had bricks/stones added in addition to vinyl siding.”

Trends tend to be fleeting, and new-construction homes are more likely to be up to date.

“New homes possess the most current designs,” says Haines. “As it relates to existing homes, the older the home, the harder it is to help the exterior of the home look current.”

7. New-construction homes are cookie-cutter and limit your choices in terms of design

“Nothing is more limiting than buying a home as is,” says Haines. “You have the most choice when buying new, regardless of the builder’s option offering.”

It all depends on the builder. Some builders build homes on spec—meaning the home is already built to certain specifications, and in that case, the customer will have very few or even no choices. Others build homes to plan but allow for a variety of selections and/or upgrades.

To determine what kind of builder you might be working with, check builder reviews before you get into a contract.

8. New-construction homes are poorer quality than pre-owned homes

“They don’t build them like they used to” is an old saying that just doesn’t hold water when buying a new-construction home. No matter what kind of house it is, the building construction principles generally do not change at all.

“For example, the construction of a load-bearing wall will not ever change—whether it’s in a new home or a custom-built home,” says Chadwick. Regardless of specific features, a house is still going to be built to a requisite standard.

“New homes are subject to the latest in building code, which has become more stringent over time,” says Haines. He notes they are subject to improved electrical wiring requirements, more ground-fault interruption requirements (including outdoor HVAC equipment in 2022), higher insulation requirements, more efficient air conditioners, and improvements in plumbing. (Old copper and early PVC are highly subject to leaks.)

9. You don’t need a real estate agent to purchase new construction

Technically this is true: You are not required to have a real estate agent for many new-construction home deals. However, it is generally still a good idea to have your own representation.

Because a new-construction deal is really no different than any other real estate transaction, there might be opportunity for you to negotiate on the price, contract terms, add-ons, completion date, and other incentives. Having a real estate agent to help with this can help make sure you’re getting the best deal possible.

Experts in Residential Real Estate in Orlando

If you are buying or selling real estate it’s quiet often the single most important financial decision you make. For the last 30 years we have helped clients buying and selling property in Orlando and the surrounding areas. Put simply, this means the knowledge and expertise accumulated over this time ensures our clients get the best representation possible.

Our experienced agents will help and guide you through the entire process providing valuable support every step of the way.

Ways To Lower Cost of Buying New-Construction Home

While buying any home is an expensive endeavor these days, buying a brand-new home—where everything is in pristine condition—will understandably cost a bit more.

Recent data from the National Association of Home Builders and the U.S. Census Bureau found that the price for a newly built home currently hovers at a national median of $436,800. Compare that with a preexisting home’s median price of $396,300, and it’s clear that buying brand-new might set you back tens of thousands of dollars extra.

Many homebuyers may find the added expense of new construction well worth it, due to the money they stand to save on renovations and repairs that might crop up in an older home. But homebuyers should also know that they can lower the costs of new construction right when they make the purchase through some smart negotiation tactics.

1. Buy into the community early

If your timeline is flexible, one prime opportunity to score major savings is by being one of the first people to purchase in a new community—even before the homes have been built—when developers are particularly eager to get buyers on board.

“There are pre-construction pricing opportunities that will likely allow you to purchase a home at a lower price,” says Bill Samuel, owner of Blue Ladder Development. “Since the potential pre-construction savings amount varies for each development, it is in your best interests to call around to every development to find the best deal.”

Samuel suggests prospective homebuyers create a spreadsheet of the different developments in their area and ask the sales representative for each development about the specific bonuses on offer.

Another potential benefit of “getting in on the ground floor” is that people who buy into a project early tend to have built-in equity by the time they close due to natural price increases as the builder sells more and more properties in the community. Translation: Your home will probably already be worth more than you paid once it’s finished.

2. Minimize the number of upgrades

Similar to a car, new-construction homes have “base models,” which come with the bare minimum. But if you want any fancy bells and whistles (think: high-end kitchen countertops or a custom paint job), this will typically jack up the price.

Homebuilders will generally have a list of what is included in the base price of a new-construction home, often referred to as the “specification level.” Beyond that, many builders offer personal selections or options that a buyer can choose to add for an additional fee.

Minimizing the amount of extras selected during your new home build is going to be one of the most significant ways to realize savings. Samuel suggests prospective buyers spend time touring the model home in any development being considered.

“Review the list of extras being offered while touring the home to see what you are happy passing on,” says Samuel.

However, keep in mind that if you do think you might want these extra features someday, you’ll probably get a better deal by adding them during construction than you will if you decide to renovate later on. This is for two reasons: One, builders buy at scale, so they get better deals with suppliers and can pass those savings on to you. Two, it saves the cost of demolishing or removing whatever items you are ultimately going to replace.

Basically, it’s always cheaper to build a new home the way you want at the beginning rather than retrofitting it down the line.

3. See if you can negotiate the sales price

While sellers of existing homes are nearly always willing to negotiate the sales price of their home, this isn’t always the case with builders. But you can try.

“Some builders won’t negotiate under any circumstances, but it is always worth a shot,” says Cliff Johnson, vice president of new homes at Realtor.com®. “Builders have [reasons] to keep prices close within the community to ensure they don’t end up with other upset buyers who discover their neighbor got a significantly better deal, though they purchased a home around the same time.”

So while you might be able to negotiate down the price of a new-construction home a little, be wary of trying to lower it too much, as that could ultimately work against you.

“Lowering the sales price, especially in a community where the builder has more homes to sell, is not a great strategy, nor is it good for the appraisals in the community,” says Kimberly Mackey, founder of New Homes Solutions and a sales and marketing management consultant specializing in residential homebuilding. “If the home values start to fall in an area, it isn’t good for the builder and the surrounding property values.”

As a result, a better bet might be to try to negotiate savings in terms of builder incentives (more on those next).

4. Find out what builder incentives might be offered

Builder incentives are basically promotions that developers use to attract buyers, and may include things like money-saving financing options (e.g., builders help with closing costs or buying down the home loan interest rate) or premium upgrades (e.g., installing high-end kitchen countertops for a fraction of the usual price).

Typically, favorable financing can be a boon to buyers during tough financial times when money is tight, whereas premium upgrades benefit buyers who long for a more custom, luxurious home without paying big bucks. Developers tend to offer more incentives during the beginning and end of a project, or during economic downturns that may slow the pace of sales. But it’s always worth asking what incentives can be offered.

One prime time to find incentives is near the end of the year.

“Sometimes a builder will provide incentives at the end of their fiscal year which is late fall of the end of the calendar year for most builders,” says Bob Seeman, vice president of sales, new homes for Realtor.com. “They want to show strong results for the whole year and the summer buying season has ended, so the incentives are often in place to extend that buying season.”

5. Go for the in-house designer’s suggestions

Another cost-cutting tactic for homebuyers is to take advantage of professionally curated “bundles” suggested by the builder’s on-staff designer.

These upgrade packages or bundles of popular features and color choices offered by some builders can save buyers money by keeping them from overspending in the selection center. Also, by offering these packages, the builder can buy premium materials in bulk and pass the savings on to the buyer.

“These bundles can keep a buyer from overimproving a home and assure them that the colors and selections will look great together,” says Mackey.

6. Be flexible on your home’s location

Don’t mind if the house is situated on a (slightly noisier) corner lot rather than tucked into a quiet cul-de-sac? Then this could help you snag a lower price that won’t affect your quality of life there.

“One easy way to get a lower price is to accept a lot that isn’t in a prime location,” says Seeman.

Similarly, if the developer has numerous projects in the works that you’re willing to explore farther afield, this flexibility could work to your advantage as well.

“If the buyer is flexible, they may find that they can get a better offer at a nearby community, depending on how that community is [selling],” Seeman explains.

7. Hire a real estate agent who knows about new construction

It is important to note that not all real estate agents have experience or understanding of new construction, and it can be a slightly different experience from purchasing a pre-existing home. So having an agent who knows this niche can save you money as well.

“I recommend that buyers work with a real estate agent who has received additional training in new construction,” says Mackey. “Buyers should ask their real estate agent to pull the comps before they make an offer on a new home so they can see the sales price others are paying in that neighborhood to put their minds at ease over the values there.”

What Are Builder Incentives?

One of the first things home shoppers learn is that the price they see on real estate listings is nearly always negotiable. And that same flexibility exists when buying a newly built home, too, in the form of builder incentives.

Builder incentives are promotions offered by developers that, much like a coupon, cut the cost of purchasing property in that community. Incentives are increasingly common today to entice cash-strapped buyers to make an offer, yet these discounts aren’t always as simple as a straight price cut.

Here’s a guide to help homebuyers understand the various types of incentives, when and why they’re offered, and how to make the most of these deals today.

What are builder incentives, and when are they offered?

Many builder incentives are widely advertised on splashy billboards and online to capture the attention of buyers and reel them in. Examples might range from “For a limited time, get $5,000 in designer upgrades!” to “Purchase before X date, and we’ll pay all of your closing costs.”

“You will find these incentives explained on websites, social media, signs, and other places a builder might advertise to the public,” explains Kimberly Mackey, founder of New Homes Solutions and a sales and marketing management consultant specializing in residential homebuilding.

Homebuilders may offer incentives at any stage of the project’s development. Many happen at the initial launch to help generate buzz for a new community and get the first few residents on board. Incentives are also commonly offered near the end of a project when there are only a few homes left to sell, since builders might be eager to close the books.

Overall economic conditions that might slow home sales (such as high interest rates or a recession) might also spur builders to work harder to get buyers through their door. The type of incentive will vary based on what builders think will strike a chord with the target homebuyer at that time.

“For example, if the economy is struggling, lower interest rates and cash at close may help buyers qualify that would otherwise be unable to afford a particular community,” says Bob Seeman, vice president of sales, new homes at Realtor.com®. “If it’s a high-end community, then property upgrades are more likely to be a successful incentive.”

While many incentives are widely advertised, others are not and are discretionary. The only way buyers will know if this incentive exists is if they or their real estate agent asks for it.

“Occasionally, builders may have some wiggle room to provide to a buyer something like a refrigerator—new construction doesn’t always include one—or blinds, or something along those lines, to incentivize a buyer further to make a move during a specific time frame, like by the end of the month or quarter,” says Mackey. “If the builder has it, the builder’s sales representatives will know how to handle the question and they are generally happy to help the buyer as much as possible.”

How financial incentives with builders work

While builder incentives may be found as price cuts on the actual house, homebuyers may more commonly see offers to help reduce costs on the financing front, with builders offering to buy down the interest rate on the home loan or pay some or all closing costs.

One caveat to keep in mind, though, is that these deals are typically tied to financing through a builder’s preferred lender. Builders often work closely with certain lenders because they want to know that the loan will close without delay once the home is completed.

“It is expensive to carry a finished home, so the builder wants to get it off their books as soon as possible,” says Mackey.

While buyers can always bring in a lender of their own choosing, these borrowers will typically be forfeiting any builder financing incentives and may end up out more money at closing as a result.

“If the builder doesn’t pay this incentive, then the buyer could have to pay all the closing costs, which typically adds around 3% of the purchase price,” says Mackey. However, she also says it’s always smart to shop around and compare offers from several lenders or brokers, just to make sure the builder’s terms are truly the best deal you can get.

Homebuyers who do find better financing terms with an outside lender should be aware that if that loan isn’t ready to close at the specified time the builder is prepared to turn the home over, buyers could face closing delay penalties, which could be hundreds of dollars per day.

“With the builder’s lender, if they can’t close, the buyer would not be on the hook for those delay fees,” says Mackey.

Whether you end up using the builder’s lender or not, Mackey always recommends buyers read the fine print of any incentive they agree to, since it may contain small conditions that may be easy to overlook in the rush and excitement to close the deal.

“There may be a caveat to these incentives, such as a ‘must close by date’ that may not be in the buyer’s control if the home isn’t finished,” warns Mackey. “Buyers should get, in writing, what happens if that home completion falls out of that date range.”

There’s also the possibility that a home loan may be delayed or fall through due to mortgage approval problems, which might occur if the buyer suddenly changes jobs at the last minute or makes a big purchase like a car. Generally, it’s best to come to the closing table having made no significant recent changes that would affect your finances.

Why builder incentives are on the rise today

During the red-hot market that began during the COVID-19 pandemic, when record levels of Americans were moving, builders didn’t have to offer many (or any) incentives for the homes they were building. Now that things are leveling a bit, however, homebuyers are starting to see a few more perks being thrown their way.

“In general, builders face similar conditions to other home sellers when it comes to pricing, and although home shoppers are interested, current mortgage rates, which are more than double year-ago levels, have drastically reduced affordability,” says Danielle Hale, chief economist for Realtor.com.

“Higher costs and uncertainty about the economic outlook have made home shoppers who can navigate today’s housing market more selective, bringing demand much more in line with supply than we’ve seen in recent years,” she adds.

“In most cases, builders today are offering incentives at every phase of a project’s development or sales cycle,” says Kelly Zuccarelli, national builder and condominium program manager for Wells Fargo Home Mortgage.

How to take advantage of builder incentives today

With interest rates on a 30-year fixed-rate mortgage more than double what they were a year ago and currently in the 7% range, Zuccarelli says they’re currently seeing builder incentives focused almost exclusively on providing buyers with a more affordable monthly payment.

One possible incentive that may be offered is a permanent interest rate buy-down, funded by the builder, that creates a lower monthly payment for homebuyers and reduces financing costs over the life of the loan. Another incentive being offered is extended interest rate locks, paid for by builders, which allow homebuyers to lock in today’s interest rates and insulate themselves against any future rate increases.

One other really interesting financing incentive homebuyers should know about is that some builders actually purchased “rate locks” when rates were lower than they are today and can offer loans below current market rates to their buyers.

Zuccarelli suggests that buyers worried about current interest rates may wish to seek out builders who purchased rate locks before mortgage rates started heading up.

That said, Seeman points out that current incentives are likely to be short-lived.