Learn Hardcore German: Wir würden lieber in einem Neubau wohnen, obwohl der Altbau von außen schöner aussieht. - We would rather live in a new building, although the old building looks nicer from the outside.

Breakdown of Wir würden lieber in einem Neubau wohnen, obwohl der Altbau von außen schöner aussieht.

Why is würden ... wohnen used here? Why not just a present-tense verb?

würden wohnen is a Konjunktiv II construction, often used to express something hypothetical, tentative, or a preference like would live.

So:

In this sentence, it helps express a preference rather than a simple fact:

German often uses würden + infinitive this way, especially in everyday speech.

What does lieber mean here, and why is it placed there?

Lieber means rather or preferably.

It comes from gern:

So:

Wir wohnen lieber in einem Neubau = We prefer to live in a new building
Wir würden lieber in einem Neubau wohnen = We would rather live in a new building

Its position is normal: it appears before the part being preferred, here in einem Neubau wohnen.