Spring's Potential Shift: Newly Constructed Homes

Thinking about purchasing a house this spring? Chances are, you're facing some difficulties with the cost and the fact that there aren't many houses available for sale. But what if there was a way to tackle both of these problems?

If you're struggling to find a home that really speaks to you and the mortgage rates are causing stress on your finances, it might be worth considering newly constructed homes. Let me tell you why.

New Home Construction Is an Inventory Bright Spot

When you're in the market for a new home, you have a choice between existing homes, which are previously owned, and newly constructed ones. Even though there has been an increase in the number of existing homes for sale this year, there are still fewer options available compared to more typical years like 2018 or 2019.

If you're hoping to widen your range of choices, considering newly built homes can be advantageous. According to Danielle Hale, Chief Economist at Realtor.com, the shortage of existing homes for sale has made new-home construction a viable option for more buyers who may not have considered it before.

The great news is, there's currently a larger selection of newly constructed homes available. Data from the Census illustrates how new home construction is on the rise in two key areas, as indicated by the most recent spike highlighted in green on the graphs below.

 a graph of a number of homes for sale

Starts, or homes where builders just broke ground, have seen a big increase lately. And completions, homes that builders just finished, are also up significantly. So, if you want a new, move-in ready home or you want to get in early and customize your build along the way, you have more options right now.

Builders Are Offering Incentives To Help with Affordability

Builders are adding extra incentives, such as mortgage rate reductions, to entice homebuyers. These perks aim to ease the burden of affordability challenges while assisting you in securing your ideal home. Mark Fleming, Chief Economist at First American, sheds light on why builders can afford to offer more incentives compared to individual homeowners:

"Builders are not locked into fixed mortgage rates. They're eager to sell homes because they don't reside in them. Not selling a home incurs costs. Many public home builders have confirmed they won't scale back on incentives, particularly mortgage rate reductions, which will bolster the performance of the new-home market during the spring home-buying season."

According to an article in HousingWire, builders are maintaining momentum with these incentives.

 “. . . the use of sales incentives still shows some momentum as 60% of respondents reported using them, up from 58% in February. “

Just remember, buying from a builder is different from buying from a home seller, so it’s important to partner with a local real estate agent. Builder contracts can be complex. A trusted agent will be your advocate throughout the process.

They’ll be your go-to resource for advice on construction quality and builder reputation, reviewing and negotiating contracts to get you the best deal, helping you decide on which customizations and upgrades are most worthwhile, and a whole lot more.

Bottom Line

If you're having trouble finding a home to purchase or grappling with affordability issues, consider reaching out to a local real estate agent. They can help you explore whether newly constructed homes might offer the solution you need.

Post a Comment