It’s no secret that the housing market has undergone significant changes over the past few years. With mortgage rates on the rise and a shortage of homes for sale, many buyers are struggling to find affordable options in the market. However, there is hope for those willing to think outside the box. One strategy that has proven successful for many homebuyers is exploring newly built homes. In today’s post, we’ll dive into why newly built homes are becoming a popular option for those looking to overcome affordability challenges in today’s housing market.
- Newly Built Homes Are More Affordable Than You Think
Many people assume that newly built homes come with a hefty price tag. However, this is not always the case. In fact, recent data from the Census shows that more newly built homes are being sold in lower price ranges than in previous years. This means that there is a growing selection of newly built homes that are within reach for buyers with modest budgets.
The graph below uses the latest information from the Census to 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 taken notice of this trend and are adjusting their strategies accordingly. Industry experts report that more builders are offering affordable options to meet the needs of budget-conscious buyers. This could mean smaller, more streamlined designs or fewer elaborate features. The goal is to provide more options for buyers who may have been previously priced out of the market.
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 further 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 the New Home Trends Institute at John 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.”
- You Can Customize Your Home to Fit Your Needs and Budget
One of the biggest benefits of buying a newly built home is that you can often play a role in the design and customization process. This means that you can prioritize the features that matter most to you and your family, while avoiding expensive upgrades that aren’t as important. By working with a builder, you can create a home that is tailored to your specific needs and budget.
- Newly Built Homes Offer Lower Maintenance Costs
Another benefit of buying a newly built home is that you can often enjoy lower maintenance costs. Since everything is new and under warranty, you’re less likely to encounter expensive repairs or unexpected maintenance issues. This can help you keep your overall housing costs down, making a new home even more affordable over the long-term.
- There Are Financing Options Available for Newly Built Homes
Finally, it’s worth noting that there are a variety of financing options available for those looking to purchase a newly built home. Depending on your situation, you may be able to take advantage of special loan programs or incentives that can make your purchase even more affordable. By working with your real estate agent and exploring all of your options, you can find a financing solution that works for you.
In conclusion, there are many reasons why newly built homes are becoming an increasingly popular option for those looking to navigate the affordability challenges present in today’s housing market. From lower purchase prices to customized design options and lower maintenance costs, a new home may be the perfect solution for your budget and lifestyle. If you’re on the market for a new home, consider exploring newly built options in your area to see if they might be a fit for your needs.