Newly built homes account for 25% of all homes for sale

Boston Real Estate for Sale

Newly built homes account for 25% of all homes for sale

With builders now trying to ramp up production where possible, newly constructed homes accounted for 25.7% of all single-family homes listed for sale in the first quarter of this year, according to data from real estate industry analysts Redfin.

“Building homes has become more attractive and profitable during the pandemic due to record-low mortgage rates and red-hot homebuyer demand,” said Taylor Marr, Redfin’s lead economist. “At the same time, many homeowners have opted to stay put and refinance or remodel their existing homes instead of selling them, allowing new-construction homes to take up a larger portion of the market.”

Single-family housing starts were up 41% in March compared to the same month one year ago, according to recent figures from the U.S. Census Bureau. At the same time, the number of existing homes listed for sale dropped by around 28% that month, compared to a year ago, according to National Association of Realtors’ data.

As such, more buyers may be tempted to buy a new home rather that look for an existing structure. One advantage of doing so is that there’s no danger of being dragged into a bidding war on a new home, which is happening very frequently in the existing home market. The disadvantage though, is that waiting lists for new homes are becoming more common too. 

Another issue real estate buyers should be aware of is the rising prices of new homes. Thanks to some rapid increases in the price of building materials, notably lumber, the median price of a new-built single-family home has increased by an average of $35,872 in the last year.

At the end of March, the median sales price of newly built homes in the U.S. was $330,800, according to the National Association of Home Builders. Interestingly though, new homes are now actually cheaper than existing homes in some parts of the country.

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If you’re in the market to buy a home, there’s some exciting news for you. Many people assume that newly built homes are more expensive than existing ones (houses that have already been lived in), but that’s not always the case. In fact, exploring newly built homes can sometimes lead to more cost-effective options, especially today. Hard to believe, right? But the data doesn’t lie.

Here are two key reasons working with your agent to look into new home construction could help you find a more budget-friendly option.

Reason 1: Lower Median Prices for Newly Built Homes

The median sales price for newly built homes is lower than the median sales price for existing homes today. This might seem surprising, but it’s true according to the latest data from the Census and the National Association of Realtors (NAR):

Why is that? Builders are focused on building what they can sell. And right now, there’s a very real need for smaller and more affordable homes – so that’s what they’ve been bringing to the market. At the same time, there are also more newly built homes already on the market than there have been over the past few years, so builders are motivated to make sure they’re selling what they’ve got available before adding more.

Reason 2: Attractive Incentives from Home Builders

Another big reason to consider a newly built home is the range of incentives that many home builders are offering. Again, since builders are aiming to sell their current inventory, some are providing special deals to sweeten the pot for homebuyers. HousingWire explains today’s trend:

“Overall, the usage of sales incentives was up to 61% in June, compared to 59% in May.”

One of the most appealing incentives right now is how builders are able to offer competitive mortgage rates. They may also provide other incentives, such as covering closing costs, or offering free upgrades.

Why This Matters to You

Considering a newly built home could open up opportunities you hadn’t thought of before. With competitive pricing and attractive incentives, you might just find that a brand-new home is the most appealing option for you.

Bottom Line

Buying a home is a big decision, and it’s essential to consider all your options. By looking into newly built homes, you might find a perfect fit for your needs and your budget.

Let’s explore the possibilities together. If you have any questions or want to see what’s available, reach out to a local real estate agent.

Peace be with you.

Boston Real Estate for Sale