Should You Consider Buying a Newly Built Home?
If you're considering purchasing a property, you may be concentrating on previously owned properties. Yet with so few homes on the market right now, it makes sense to think about all your possibilities, including a newly constructed home.
The Quantity of Freshly Constructed Houses Is Growing
Even though there are currently more homes for sale than there were at this time last year, there are still historically few residences on the market. Years of underbuilding, in which not enough new homes were constructed to meet demand, are one factor in this.
The graph up top demonstrates how little new housing has been produced during the last 14 years. But it also reveals another significant pattern: Every year, more new homes are being constructed. That's good news for purchasers, as First American Chief Economist Mark Fleming explains:
“While existing-home inventory remains limited, the silver lining for home buyers is that new-home inventory is on the rise, and a new home at the right price is a pretty good substitute.”
Builder Incentives Can Provide a Boost
Even though there are more new houses available for purchase, builders are limiting their pace until they sell more of their present stock. Logan Mohtashami, Lead Analyst at HousingWire, claims:
“The builders have to work off the backlog of homes, but instead of 3%-4% mortgage rates, they’re dealing with 6% plus mortgage rates, which means they have to provide many incentives to make sure those homes sell.”
To aid customers in purchasing these homes, many builders are currently providing incentives. Fleming continues:
“The National Association of Home Builders reported that nearly two-thirds of builders were offering incentives, including mortgage rate buydowns, paying points for buyers and price reductions, which could entice potential home buyers.”
A builder who's willing to pay to cut your mortgage rate could be a game changer. According to First American economist Ksenia Potapov,
“A one percentage-point decline in mortgage rates has the same impact on affordability as an 11 percent decline in house prices.”
Should You Get a New House?
Working with a reputable real estate expert who can assist you in weighing the benefits and drawbacks of each option is the best approach to decide what kind of home to purchase. They are aware of the properties that are on the market in your area and which builders may be providing incentives that are advantageous to you.
Even though there aren't many homes available right now, the supply of new homes is growing, and many builders are providing incentives. Contact me so I may assist you in weighing the benefits and drawbacks of looking for a new house vs an existing one.