If you intend to move, ask yourself where you are and what is your future home. Maybe you will have the real image of this house. But if you don’t know if you want to buy a new construction home, you probably haven’t envisioned one.
A trusted real estate agent can help you convey both reasons you should reconsider.
1. Adding a newly built home gives you more options.
There are two types of housing on the market: new homes and existing homes. A new construction home is defined as a home that is newly built or under construction. An existing home is a home that is currently occupied by the previous owner. The inventory of the existing house is currently tight. But there may be options on the new house.
Data from the Census and the National Association of Realtors (NAR) show that new construction homes represent a larger share of the current housing stock than usual (see chart below):
From 1983 to 2019 (the last normal market year), new construction homes accounted for just 13% of the total stock of homes for sale. But today this figure has exceeded 33%. After over a decade of construction, rest assured that today’s builders are not overdoing it. Today, despite increasing new construction, there is still an overall housing shortage. However, the proliferation of new structures can change the game by providing more options to explore.
2. New homes can be cheaper than you think.
You may still be wondering if new construction is the right option for you. If you’ve previously deleted something because you thought you were on a budget, keep this in mind. The price gap between new and existing homes is narrowing. That is why.
Builders build what is in demand. They know people need more options right now, especially smaller and potentially more affordable options. Therefore, they focus on building small houses at low cost. The chart below shows that the price gap between new and existing homes is narrowing.
As LendingTree explains:
“In the past, newly built homes have been much more expensive than existing homes — but that gap has been getting smaller recently. In some places today, you may find that the cost to build versus buy is roughly the same.”
And an article from CNBC says:
“While new builds are still sold for slightly more than existing homes, the price gap has significantly narrowed . . .”
Not to mention that some builders are offering to lower their prices and buy out your mortgage interest to make the deal easier. There are many reasons to consider new construction these days. Other shoppers seem to think so too. As Freddie Mac said:
“As the supply of existing homes for sale remains low and home prices continue to rise, more buyers are choosing to purchase new homes than in previous years.”
Find out that the newly built house is not the same as the purchase purchase. There are several small prints in the construction contract. So work with a local agent who knows the market, knows the reputation of the builders and knows what to look for in a particular contract so you have a professional who can help you explore this option.
