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The Top 2 Reasons To Consider a Newly Built Home

When you’re planning a move, it’s normal to wonder where you’ll end up and what your future home is going to look like. Maybe you’ve got a specific picture of that house in your mind. But unless you came into this process knowing you want to buy a newly built home, you may not have pictured new home construction.

A trusted real estate agent can help walk you through these two reasons you may want to reconsider that.

1. Including Newly Built Homes Could Expand Your Choices

There are two main types of homes available on the market: new and existing. A newly built home refers to a house that has just been constructed or is still in the process of being built. An existing home is one that a previous homeowner has already lived in. Currently, the inventory of existing homes is tight, but there may be more options for you among newly constructed homes.

According to data from the Census Bureau and the National Association of Realtors (NAR), newly built homes now represent a larger portion of today's housing inventory than usual:

Between 1983 and 2019 (considered the last normal year in the market), newly built homes accounted for only 13% of the total homes for sale. But today, that figure has climbed to over 33%.

After more than a decade of underbuilding, builders today are not overextending. Even with the increase in new construction, there remains a significant housing shortage. However, for you, the rise in new builds can be transformative, providing you with more options in your search.

2. Newly Built Homes May Be More Affordable Than Expected

You might still be asking if a new build is genuinely within your reach. If you’ve previously dismissed them, thinking they would exceed your budget, it might be time to reassess. The price gap between newly built homes and existing houses is narrowing. Here's why.

Builders focus on what’s in demand, and they understand that people need more options now, especially smaller and potentially more affordable ones. That's why they’re constructing smaller homes at lower price points. The gap between the prices of new and existing homes is shrinking as a result:

As LendingTree notes:

“In the past, newly built homes have been much more expensive than existing homes — but that gap has been getting smaller recently. In some places today, you may find that the cost to build versus buy is roughly the same.”

Similarly, CNBC reports:

“While new builds are still sold for slightly more than existing homes, the price gap has significantly narrowed . . .”

Additionally, some builders are offering incentives such as price cuts and mortgage rate buy-downs to sweeten the deal. Today, there are plenty of reasons why new builds may be worth considering. Other buyers certainly seem to think so. As Freddie Mac states:

“As the supply of existing homes for sale remains low and home prices continue to rise, more buyers are choosing to purchase new homes than in previous years.”

However, it's essential to understand that buying a newly built home isn't the same as buying an existing one. Builder contracts have unique clauses and considerations. Therefore, partnering with a local agent who understands the market, builder reputations, and contract specifics can ensure you have an expert by your side to help you explore this option.

Bottom Line

If you're curious about what builders are doing in our area, let’s connect and explore the options together. And if you're open to casting a wider net to expand your choices even more, we can discuss broadening your search to include nearby towns.

| 8-7-2024

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