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Considering a Newly Built Home? Here’s What You Need to Know

If you’re in the market for a home, you might be leaning towards existing properties. However, with today’s limited inventory, exploring newly built homes is worth considering.

New Home Construction is Increasing

Although the current housing market has more homes available than last year, it’s still experiencing historically low inventory levels. This shortage is partly due to years of insufficient new construction to meet demand.

Recent data highlights that while the production of new homes has been relatively low over the past 14 years, it’s now on the upswing. As Mark Fleming, Chief Economist at First American, notes, this trend benefits buyers:

“While the supply of existing homes remains tight, the increasing availability of new homes presents a promising alternative. A new home at the right price can be a valuable option.”

Builder Incentives: A Key Advantage

Despite the rise in new home availability, builders are cautious, working through their existing inventory before ramping up further construction. As Logan Mohtashami, Lead Analyst at HousingWire, explains:

“Builders are managing a backlog of homes and are facing higher mortgage rates. To remain competitive, they’re offering various incentives to attract buyers.”

Many builders are currently providing incentives such as mortgage rate reductions, paying points for buyers, and price cuts. According to Fleming:

“Nearly two-thirds of builders are offering incentives, which can include mortgage rate buydowns and price reductions, making new homes even more appealing.”

Ksenia Potapov, Economist at First American, emphasizes the impact of these incentives:

“Reducing mortgage rates by one percentage point can significantly improve affordability, similar to an 11 percent drop in house prices.”

Should You Opt for a Newly Built Home?

Choosing the right home involves evaluating both new and existing options. Working with a knowledgeable real estate professional can help you navigate these choices and identify any available builder incentives.

In Summary

With a rise in new home inventory and attractive builder incentives, exploring newly built homes might be a smart move. Let’s discuss how to find the best option for you in today’s market.

| 8-14-2024