Are you in the market to buy a new home but feeling discouraged by the low supply and high prices in the current housing market? Well, don’t lose hope just yet! According to experts at Extreme Investor Network, new construction homes may be the key to finding your dream home amidst these challenges.
New construction homes are gaining popularity among buyers for several reasons. One major advantage is the increased availability and incentives that new homes offer compared to previously owned ones. In fact, in March alone, about 693,000 new single-family houses were sold, marking an 8.3% increase from the previous year. The median sales price for these new homes was $430,700, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Meanwhile, sales for previously owned homes saw a decline of 3.7% from the previous year, as reported by the National Association of Realtors. This shift in buyer preference towards new construction is fueled by the limited inventory of existing homes in many areas across the U.S. The “mortgage rate lock-in effect,” as described by experts, is keeping existing homeowners from selling, as they are reluctant to give up their lower mortgage rates for higher ones currently prevailing in the market.
Buyers are finding builders to be more flexible with pricing and incentives, making new construction homes a more attractive option. Builders are offering incentives such as rate buy-downs, price cuts, and even covering closing costs to lure potential buyers. This flexibility in pricing has incentivized buyers to explore the new home sales market, noted Matthew Walsh, assistant director and economist at Moody’s Analytics.
Additionally, the price gap between new construction homes and existing homes has narrowed significantly in recent months. While new builds traditionally sold for a higher price, the current median price for a new home is only about 4% higher than that of an existing house. This decrease in price gap is a result of builders prioritizing transaction volumes over margins, providing buyers with more affordable options in the new home sales market.
In conclusion, if you’re in the market for a new home and feeling discouraged by the current housing market conditions, consider exploring new construction homes. With increased availability, pricing incentives, and a narrowing price gap with existing homes, new construction homes may just be the solution you’ve been looking for. Stay informed and make the most of your investment with insights from Extreme Investor Network.
