Hot water is essential to everyday life. From showers and laundry to washing dishes and cleaning up after meals, your hot water heater works behind the scenes to keep your home comfortable and running smoothly. When it's time to replace an aging unit or upgrade to one of today's energy efficient water heaters, choosing the right system can have a lasting impact on your home's comfort, energy usage and utility costs.
Whether you're replacing an existing unit, building a new home or researching the best water heaters for your household, understanding your options can help you make a confident purchase decision.
This water heater buying guide covers everything you need to know, including the different types of water heaters, water heater sizes, gas vs electric water heater comparisons and the benefits of Tank vs Tankless Water Heaters.
Quick take
Start by choosing the type of water heater that fits your home, then compare tank capacity, fuel type, energy efficiency, installation needs and long-term operating costs. The right hot water heater should match your household size, peak hot water demand and available space.
Understanding the Different Types of Water Heaters
The first step in learning how to choose a water heater is understanding the options available.
Traditional storage option
Conventional Water Heaters
Conventional water heaters, also known as hot water tanks, are the most common type found in homes today. These systems store and continuously heat water in an insulated tank until it's needed.
When hot water is used, the tank refills and reheats incoming water to maintain the desired temperature.
Advantages of Conventional Water Heaters
- Lower upfront purchase cost
- Widely available
- Easier replacement in existing homes
- Available in multiple water heater sizes
- Reliable performance
Potential Drawbacks
- Limited hot water supply based on tank capacity
- Standby energy loss from continuously heating stored water
- Larger footprint than tankless models
- May require more frequent replacement than tankless water heaters
Conventional water heaters are often a practical choice for homeowners looking for dependable performance and lower initial costs.
On-demand option
Tankless Water Heaters
Tankless water heaters, sometimes called on-demand water heaters, heat water only when it is needed. Instead of storing hot water in a tank, these units use powerful heating elements to warm water as it passes through the system.
Advantages of Tankless Water Heaters
- Continuous hot water supply
- Greater energy efficiency
- Space-saving design
- Longer lifespan
- Reduced standby energy consumption
Potential Drawbacks
- Higher upfront purchase price
- Installation may require electrical or gas line upgrades
- Multiple simultaneous hot water demands may require a larger-capacity unit
- Annual maintenance may be recommended, particularly in areas with hard water
Tankless water heaters are popular among homeowners who want improved efficiency and the convenience of endless hot water.
High-efficiency option
Hybrid Water Heaters
Hybrid water heaters combine traditional tank storage with heat pump technology to maximize efficiency.
Instead of generating heat directly, they pull heat from surrounding air and transfer it to the water.
Advantages of Hybrid Water Heaters
- Exceptional energy efficiency
- Lower operating costs
- Large hot water capacity
- Potential utility savings over time
Potential Drawbacks
- Higher purchase price than conventional water heaters
- Requires more installation space than many other water heater types
- Performance may be affected by cooler installation environments
- Some models can produce more operating noise due to heat pump technology
Hybrid water heaters are among the most energy efficient water heaters available and are often a great choice for households focused on reducing long-term energy expenses.
Tank vs Tankless Water Heaters: Which Is Better?
One of the most common questions homeowners ask is what type of water heater do I need?
The answer often comes down to choosing between traditional hot water tanks and tankless water heaters.
Water Heater Comparison: Tank vs Tankless
A Conventional Water Heater May Be Best If
- You're replacing an existing tank model
- You want a lower upfront investment
- Your household has predictable hot water usage
- Installation simplicity is important
A Tankless Water Heater May Be Best If
- You want continuous hot water
- Energy efficiency is a priority
- Space is limited
- You plan to stay in your home long term
This water heater comparison highlights why both options continue to be popular among homeowners.
What Size Water Heater Do I Need?
Choosing the proper size is one of the most important factors when learning how to buy a hot water heater.
A water heater that's too small may leave your family waiting for hot water. A unit that's too large can result in unnecessary energy usage and higher operating costs.
Water Heater Sizes
1–2 People
30–40 Gallons
Recommended tank capacity for smaller households.
2–4 People
40–50 Gallons
A common capacity range for average households.
4–6 People
50–80 Gallons
Supports larger families and higher daily usage.
6+ People
80+ Gallons
Best for large households with significant hot water demand.
Water Heater Sizes Explained
Choosing the right water heater size is one of the most important steps when selecting a new system. While household size provides a helpful starting point, daily hot water usage often has the biggest impact on determining the ideal capacity.
If your water heater is too small, you may run out of hot water during busy mornings or while running multiple appliances. A water heater that's too large may consume more energy than necessary and increase operating costs.
Small households
30-40 Gallon Water Heaters
30- to 40-gallon water heaters are often a good fit for apartments, condos and smaller households with one or two occupants.
These models can typically handle:
- One bathroom homes
- Light laundry usage
- Limited simultaneous hot water demand
Average households
40-50 Gallon Water Heaters
40- to 50-gallon water heaters are among the most popular options for average households.
These systems are often recommended for:
- Families of two to four people
- Homes with two bathrooms
- Moderate daily hot water usage
Many homeowners find that a 50-gallon model provides an excellent balance of capacity and efficiency.
Larger households
50-80 Gallon Water Heaters
Larger households often benefit from a 50- to 80-gallon water heater.
These units are designed to support:
- Families of four to six people
- Multiple bathrooms
- Frequent laundry and dishwasher use
- Higher overall hot water demand
Homes with soaking tubs, large showers or multiple family members using hot water at the same time may find these larger capacities particularly beneficial.
High-demand households
80 Gallon and Larger Water Heaters
For large households and homes with significant hot water demand, an 80-gallon or larger water heater may be the best solution.
These models are commonly chosen for:
- Households with six or more occupants
- Multi-generational living arrangements
- Homes with luxury bathrooms
- Heavy daily hot water usage
Tankless Water Heater Sizing
Tankless water heaters are sized differently than traditional hot water tanks. Instead of storage capacity, tankless systems are rated based on gallons per minute (GPM).
The right tankless water heater size depends on:
- Number of bathrooms
- Simultaneous appliance usage
- Household size
- Peak hot water demand
If multiple showers, appliances and fixtures may be used at the same time, a higher-capacity tankless unit may be necessary to maintain consistent performance.
Questions to Consider
Before determining what size water heater you need, ask yourself:
- How many people live in your home?
- How many bathrooms do you have?
- Do multiple people shower at the same time?
- How often do you run laundry and dishwashers?
- Do you have a large soaking tub or whirlpool tub?
These factors can significantly impact your home's hot water demand.
Sizing Tankless Water Heaters
Tankless water heaters are sized differently than conventional water heaters. Instead of gallons, they're rated by flow rate, measured in gallons per minute (GPM).
The more fixtures and appliances that may use hot water simultaneously, the higher the required flow rate.
For example:
- Shower: 2–3 GPM
- Dishwasher: 1–2 GPM
- Washing machine: 2–3 GPM
A larger household may benefit from a higher-capacity tankless water heater capable of handling multiple demands at the same time.
Gas vs Electric Water Heater
Another important decision is choosing between a gas and electric hot water heater.
Both options offer advantages depending on your home's setup and energy preferences.
Gas Water Heaters
Gas water heaters use natural gas or propane to heat water.
Benefits
- Faster recovery times
- Lower operating costs in many regions
- Well-suited for larger households
- Reliable performance during periods of heavy hot water demand
Potential Drawbacks
- Requires access to natural gas or propane
- More complex installation requirements
- Ventilation may be necessary
Electric Hot Water Heater Models
Electric water heaters use heating elements powered by electricity.
Benefits
- Simpler installation
- Lower initial purchase cost
- Widely available
- No gas connection required
Potential Drawbacks
- Slower recovery rates compared to gas models
- Operating costs may be higher depending on local utility rates
Homeowners researching the best electric water heater should compare capacity, efficiency ratings and available smart features.
How Much Is a New Water Heater?
One of the most common questions homeowners ask is, "How much is a new water heater?"
The answer depends on the type of system, size, fuel source and installation requirements.
Conventional Water Heaters
Generally offer:
- Lower purchase costs
- Lower installation costs
- Reliable performance
Tankless Water Heaters
Typically feature:
- Higher upfront costs
- Potential installation upgrades
- Lower long-term energy consumption
Hybrid Water Heaters
Often provide:
- Higher purchase prices
- Excellent energy savings
- Lower operating costs over time
When comparing options, it's helpful to evaluate total ownership costs rather than focusing solely on the initial purchase price.
Features Worth Paying For
Modern water heaters offer features that improve safety, efficiency and day-to-day convenience. These upgrades are especially helpful if you want better control, easier maintenance or added protection against water damage.
Home protection
Leak Detection
Leak detection systems can identify water leaks early and help reduce the risk of costly water damage.
- Helps alert you to leaks sooner
- Supports faster response time
- Useful for basements, utility rooms and closets
Connected convenience
Smart Monitoring
Some water heaters connect to mobile apps that allow homeowners to monitor performance remotely.
- Temperature adjustments
- Energy tracking
- Maintenance reminders
- Diagnostic alerts
Energy management
Vacation Mode
Vacation settings reduce energy usage when hot water demand is temporarily lower.
- Helpful during travel
- Reduces unnecessary heating
- Keeps the system ready when normal use resumes
Maintenance support
Self-Cleaning Technology
Sediment buildup can reduce efficiency over time. Self-cleaning systems help improve performance and reduce maintenance requirements.
- Helps limit sediment buildup
- Supports better long-term efficiency
- May reduce routine maintenance needs
Remote access
Wi-Fi Connectivity
Wi-Fi connected water heaters offer greater control and monitoring capabilities from virtually anywhere.
Signs It's Time to Replace Your Water Heater
Even the best water heaters eventually need replacement. If your system is showing performance issues, visible damage or rising operating costs, it may be time to compare new options.
Quick warning checklist
- Hot water runs out faster than it used to
- Water looks rusty or discolored
- The tank makes popping, rumbling or banging sounds
- Water appears around the base of the unit
- Utility bills increase without a clear reason
Performance issue
Inconsistent Hot Water
If water temperatures fluctuate frequently or hot water runs out quickly, your system may be nearing the end of its lifespan.
Water quality concern
Rust-Colored Water
Discolored water can indicate corrosion inside the tank.
Sound warning
Unusual Noises
Popping, rumbling or banging sounds often signal sediment buildup.
Urgent issue
Visible Leaks
Water around the base of the unit should never be ignored.
Efficiency warning
Rising Utility Bills
An aging water heater may work harder to deliver the same performance, increasing energy usage.
Water Heater Maintenance Tips
Routine maintenance can help extend the life of your water heater and improve efficiency.
Recommended maintenance includes:
- Inspecting for leaks regularly
- Checking pressure relief valves
- Flushing sediment from conventional water heaters
- Reviewing manufacturer maintenance recommendations
- Scheduling professional inspections when needed
Proper maintenance can help maximize performance and reliability throughout the life of the unit.
Frequently Asked Questions About Water Heaters
Ready to shop?
Finding the Best Water Heaters for Your Home
The best water heaters are those that match your household's hot water demands, available space, energy goals and budget.
Whether you're considering conventional water heaters, tankless water heaters, hybrid water heaters or searching for the best electric water heater, understanding the differences between each option can help you make a confident decision.
Explore water heaters at NFM to compare capacities, features and energy-saving technologies and find the right hot water heater for your home.
