In todays housing market, there are two main affordability challenges impacting buyers:mortgage ratesthat arehigherthan theyve been the past couple ofyears, and rising home prices caused bylow inventory. To overcome those challenges, many people are working with their agents to find less expensive homes. And with newly built homes making up a historically largepercentageof the total available inventory today, that search often includes brand new homes.
People Are Spending Less on Newly Built Homes
The graph below uses the latest information from theCensusto show, in June, more of the newly built home sales in this country were in lower price ranges than in 2022:
Last year, only 58% of newly built home sales were less than $500,000. This 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 have picked up on this trend and are reacting accordingly. George Ratiu, Chief Economist atKeeping 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 . . .
Newdatafrom theCensusfurther confirms this pattern it shows the median sales price of newly built homes has dipped down in recent months (see graph below):
And as Mikaela Arroyo, Director of theNew Home Trends InstituteatJohn Burns Real Estate Consulting,says, the builders who are most responsive to this trend are forming pathways to homeownership:
. . .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 thats really needed. If youre hoping to buy a home soon, partner with a local real estate agent to find out whats available in your area. An agent can help you look at newly built homes or ones under construction nearby.
Bottom Line
If youre having a hard time finding a home you like in your budget, connect with a real estate professional. You needan agentwho knows all about the latest inventory in your area, including homes still under construction or just built. That way you have an expert on your side who can provide information on builder reputations, builder contracts and negotiations, and more to help you with the homebuying process.
When you are ready to buy or sell real estate, please call me, Marie McLaughlin 727-858-7569.
Source:https://www.keepingcurrentmatters.com/2023/08/17/people-want-less-expensive-homes-and-builders-are-responding/
