In today’s housing market, there are two main affordability challenges impacting buyers: mortgage rates that are higher than they’ve been the past couple of years, and rising home prices caused by low inventory. As a result of these factors, people want less expensive homes that they can afford to buy.
To overcome those challenges, many people are working with their real estate agents to find less expensive homes. And with newly built homes making up a historically large percentage of the total available inventory today, that search often includes brand new homes. In that vein, we recently wrote a blog that discusses why you should consider a newly built home.
People Are Spending Less on Newly Built Homes
The graph below uses the latest information from the most recent Census to show that in June more of the newly built home sales in the United States were in lower price ranges than in 2022:
In 2022, only 58% of newly built home sales were less than $500,000. As of June, that number was up to 65%. This means more people are buying less expensive newly built homes right now while affordability remains a challenge.
Builders Are Offering Lower-Cost Options
Builders are responding to this trend and are reacting accordingly. As George Ratiu, Chief Economist at Keeping Current Matters, explains:
“Builders are also responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points . . .”
New data from the Census only further confirms this pattern. It shows that the median sales price of newly built homes has dipped down in recent months (see graph below):
And as Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, says, the builders who are most responsive to this trend are creating pathways to homeownership for buyers concerned with affordability:
“. . . it is creating opportunities for people to be able to afford an entry-level home in an area. . . . if you get that size down, that automatically will make it a more affordable home. The [builders] that are decreasing [size] the most are probably the ones that try to build more of an affordable product.”
How an Agent Can Help
Builders producing smaller, less expensive newly built homes give you more affordable options at a time when that’s really needed. This is especially important for first-time home buyers. So, if you’re hoping to buy a home soon, partner with a local real estate agent to find out what’s available in your area. A reputable and trusted real estate agent can help you look at newly built homes or ones under construction nearby.
Bottom Line
If you’re having a hard time finding a home you like in your budget, let’s connect. You need a real estate professional like us who knows all about the latest inventory in our area, including homes still under construction or just built. That way you’ll have an expert on your side who can provide information on builder reputations, builder contracts and negotiations, and more to help you with the home-buying process. We should talk if you’re ready to find your next home.
