Newly Built Homes Could Be a Game Changer This Spring
Considering purchasing a home this spring? Chances are, you’re grappling with the current affordability obstacles and contending with the scarcity of available homes on the market. However, what if there existed a remedy that could address both issues?
If you’re encountering difficulties in discovering a home that meets your preferences, and if mortgage rates are straining your financial plans, it might be worth considering newly constructed homes. Here’s why.
New Home Construction Is an Inventory Bright Spot
When in the market for a home, you have the option to select from existing homes (those already built and previously owned) or newly constructed ones. Although the inventory of existing homes for sale has risen this year, it remains lower compared to more typical years in the housing market, such as 2018 or 2019.
So, if you’re looking to expand your pool of options even more, turning to newly built homes can help. As Danielle Hale, Chief Economist at Realtor.com, explains:
“The shortage of existing homes For Sale has opened up the possibility of new-home construction to more buyers who may not have once considered it.”
And the good news is, there are more newly built homes to pick from right now. The graphs below use data from the Census to show how new home construction is ramping up in two key areas (see most recent spike in green):
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
And to sweeten the pot, builders are offering things like mortgage rate buy-downs and other perks for homebuyers right now. This can help offset today’s affordability challenges while also getting you into your dream home. Mark Fleming, Chief Economist at First American, explains why you may find builders have more wiggle room to offer more for you than the typical homeowner:
“Builders aren’t rate locked-in. They would love to sell you the home because they’re not living in it. It costs money not to sell the home. And many of the public home builders have said in their earnings calls that they are not going to be pulling back on incentives, especially the mortgage rate buydown, so that will help the new-home market continue to perform well in the spring home-buying season.”
An article from HousingWire also says this about what builders are offering right now:
“. . . the use of sales incentives still shows some momentum as 60% of respondents reported using them, up from 58% in February. “
Keep in mind that purchasing from a builder differs from buying from a home seller, underscoring the importance of teaming up with a local real estate agent. Builder contracts can be intricate, and having a reliable agent by your side is crucial.
Your agent will serve as your advocate throughout the process, offering guidance on construction quality and builder reputation. They will review and negotiate contracts to secure the best possible deal for you, assist in determining which customizations and upgrades offer the most value, and provide a range of other invaluable services.
Bottom Line
If you’re struggling to find a home to buy, or with today’s affordability challenges, let’s connect to see if newly built homes could be the solution you’re looking for.
