New Construction Home Warranty Explained

What is a New Construction Home Warranty?

A new construction home warranty is a builder’s promise — a guarantee that your brand-new custom home is built well, and if something goes wrong, your custom home builder will make it right.

A well-structured new construction warranty covers three key areas:

• Workmanship and materials

• Major systems

• Structural integrity

Is a New Construction Home Warranty the Same as a Builder’s Warranty?

While people often use the terms interchangeably, no, a new construction home warranty doesn’t necessarily mean you’re getting a builder’s warranty. Some custom builders rely on third-party warranty companies rather than offering a guarantee, and large national firms may include warranties that are vague, minimal, or heavily limited by fine print. The key distinction is that a builder’s warranty is a direct promise from the company that built your home, which is the guarantee of accountability you want.

Large builders, short warranty periods

Most large national builders, who build thousands of homes each year, offer a 1-year builder’s warranty for workmanship and materials. Which isn’t much. A homeowner will live through exactly one of each of the four seasons in their new home, and then the warranty period is over. It’s not enough time for most problems to make themselves visible. In fact, large national builders have undergone scrutiny for setting aside hundreds of millions of dollars each year to handle or defend against defect claims on brand new homes. Investigations by major news outlets have uncovered far too many horror stories from homeowners who are now battling builders, in suits or arbitrations, over extreme water damage, foundation issues, extensive drywall cracking, and more.

1-2-10 Structural Warranty

Some builders offer what’s known as a 1-2-10 structural warranty — a common format in the new construction world. It typically includes 1 year of coverage for workmanship and materials like drywall, flooring, and tile; 2 years for major systems such as HVAC, electrical, and plumbing; and 10 years for structural elements like the foundation, framing, and load-bearing walls. The 1-2-10 warranty can be effective if it is backed by the custom home builder, but it is often provided by a third-party company. That means if something goes wrong, you’re dealing with a claims processor, not the people who actually built your home.

*Best in American Living Award (BALA) for best custom home in 2025.

A Custom Home Warranty Backed By Your Builder

The best new construction home warranty is backed by your builder. Luxury home builder Kevin Reed says, “We have the confidence that we build homes that won’t have issues.” In other words, a builder’s warranty should stand behind the company’s work. Ideally, your custom home builder is big enough to have a wealth of in-house expertise and small enough to pay attention to the details. Large national builders work at scale and may cut corners, skim over trouble spots, or turn a blind eye, which may make them hesitant to offer a builder’s warranty that’ll really cover common issues that arise in the first few years.

When it comes to your builder’s warranty, a multi-year structural builder’s warranty helps homeowners rest easily. Think “no-hassle returns” and money-back guarantees. Here’s the thing, it’s not yet the standard in the home building market. Many aspiring homeowners don’t realize the importance of a builder’s warranty until they’ve contracted with poor-quality builders. Focusing too much on finding a good deal can also make it easy to overlook details about a company such as their reputation, building processes, and commitment to quality.

Knowing that your builder stands behind their work is essential, which is why you want a new construction custom home warranty that lasts longer than a year. 

Reasons a builder would offer a 3-year warranty

New construction homes settle over the course of several years as they adjust to the environment. The soil compresses, materials like wood expand and contract with seasonal humidity, and the structure responds to changes in temperature and moisture. Minor signs of settling, like small drywall cracks or nail pops, are common and expected in the first few years. Large foundation cracks, doors that no longer close properly, or uneven floors indicate poor construction or site preparation rather than normal settling.

A home builder with a longer warranty is familiar with how your house will settle and is essentially saying that their work is to be trusted. What gives a builder this level of confidence? 

1. They build properly. Trustworthy builders employ and contract with seasoned tradespeople who know their craft. If you’ve ever been on a home building site run by a larger builder, you’re likely to find at least a few novices or workers who know a very narrow set of skills. Everyone needs to start somewhere. But do you want them learning on your home? Your crew needs to know how to prepare materials properly. Tasks like painting the ends of boards (to seal them prior to installation, reducing their absorption capacity and therefore insuring their integrity for longer) can get skipped over on a time-pressurized job site run. A multi-year new construction home warranty gives you peace of mind that your builder is paying attention to the details.
2. They use quality materials. Great custom home builders are always on the lookout for good materials that will last and be easy to maintain. This isn’t easy. There are a lot of choices, vendors, and products. But builder’s who back their work with extended structural warranties have been around long enough to know the gold among the dross. They understand what kinds of characteristics to look for, what questions to ask a manufacturer, and which materials may just not work at all. For example, builders have architects come to them wanting to build with stone or stucco, which are reservoir-cladding (i.e. hold a lot of water), and your custom home builder needs to know this can cause problems with the build.
3. They manage water well. Your best builders are adamant about proper drainage and flashing, and following best practices for water management in home building. The risks of not managing water properly are very high. Condensation, leaks, cracks, caving, rot. Brick lain right up against the chimney, missing drainage mats, shortcuts that produced small problems that turned into huge problems. It’s scary stuff, and you don’t want it lurking behind the walls in the early years without you knowing it.
4. They’re award-winning. One of the tell-tale signs of a great builder is consistent awards like Best in American Living™ Awards and the North Carolina Home Builders Association Stars Awards for Best Single Family Homes.

How Does a Good New Construction Home Warranty Work?

A good new construction home warranty is simple, responsive, and built into your contract with your builder. It’s not buried in fine print or farmed out to a third-party call center. When you have a builder’s warranty that lasts longer than a year, you have a commitment from the same people who designed and built your home to make it right if something goes wrong beyond the one year settling window.

If an issue arises, clients simply request service or notify the builder directly. Digital platforms allow clients to attach pictures or videos to a request and give notification to the builder of each request immediately. If an issue is a water leak or anything else that’s quite urgent, a custom home builder like Bluestone will be there to remediate within an hour. If the issue is nonurgent, your builder will schedule a time in the near future that works for our clients to perform the work needed.

A good new construction home warranty also makes it easy to test-run any ongoing maintenance plans you’re considering with your builder for home care post-warranty.