Newly built homes are taking up a significant share of today’s housing inventory, and as per the recent report by the National Association of Home Builders (NAHB), it’s a positive sign for homebuyers.
“Newly built homes available for sale accounted for 31% of total homes available for sale in November, compared to an approximate 12% historical average.”
The Census data reveals an increase in both housing starts and completions, reassuring many that builders aren’t constructing too many homes. As we move ahead, it may become more feasible for homebuyers to achieve their dream homes. This article aims to explain why the near-record percentage of new home inventory is perfect news for aspiring homeowners.
The housing market typically operates on a supply and demand basis, with inventory levels influencing the availability and affordability of housing options. More new homes in the market are synonymous with increased choices and the potential for better affordability. According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), the increase in housing starts is a good sign since it helps replenish the inventory and boost the demand-supply balance.
“Even more home building will be needed with the housing shortage persisting in most markets . . . Another 30% rise in home construction can easily be absorbed in the marketplace . . .”
Furthermore, homebuyers can avail themselves of several exciting offers from homebuilders. Some of these offers include mortgage rate buy-downs that help offset the current affordability challenges, making it easier for buyers to own their dream homes. As Patrick Duffy, Senior Real Estate Economist at U.S. News explains, these incentives offer buyers the chance to invest in a home with long-term value and appreciation, helping them build equity with time.
“Builders have been using mortgage interest rate buydowns for many years as a sales incentive whenever interest rates are relatively high, . . .Today more builders are offering rate buydowns for the entirety of the loan, allowing buyers to finance more home for the same payment amount.”
Newly built homes come with several benefits. For instance, they tend to be energy-efficient, providing financial and environmental benefits that are availed of over time. They are also designed with modern features incorporated into the layout. So, when buying a new home, buyers can customize their houses to meet their preferences and requirements without having to renovate the home’s internal infrastructure.
Historically, new home buyers tend to be happier with their purchases than those who buy previously owned homes since they have more input into the design process. Additionally, new construction homes come with warranties, reducing the costs of emergency repairs and providing buyers peace of mind. Also, buyers can personalize their homes and monitor the project during the construction stage, ensuring it meets their needs and standards.
The near-record percentage of new home inventory is good news for buyers since it boosts the supply of housing options while providing ample opportunities to customize and personalize their homes. New home builders offer several incentives to buyers, including mortgage rate buy-downs, making affordability issues less of a concern. These homes come with warranties, modern features, and energy efficiency, providing long-term value and satisfaction. Aspiring homeowners can now invest in new homes with greater ease, creating the potential for happier, more fulfilled homeowning experiences.