The Top 2 Reasons To Consider a Newly Built Home

The Top 2 Reasons To Consider a Newly Built Home

When you're gearing up for a move, it's natural to envision where you'll settle and what your future dwelling will entail. Perhaps you have a clear image of your dream home in mind. However, unless you entered this journey with the intention of purchasing a newly constructed residence, you might not have considered the option of new home construction.

A trusted real estate agent can help walk you through these two reasons you may want to reconsider that.

1. Adding Newly Built Homes Could Give You More Options

Currently, two main categories of homes are available on the market: new and existing. A newly built home refers to a house that has either just been constructed or is currently under construction. On the other hand, an existing home is one that has been previously inhabited by a homeowner.

At present, the inventory of existing homes is limited. However, there are potential opportunities for you to explore within the realm of new home construction.

Data provided by the Census and the National Association of Realtors (NAR) indicates that newly constructed homes constitute a larger portion of today's housing inventory compared to historical norms (refer to the graph below for visual representation):

From 1983 to 2019, which was considered the last normal year in the market, newly constructed homes accounted for just 13% of the total inventory of homes available for sale. However, today, that figure has surged to over 33%.

It's important to note that despite this increase in new construction, builders are not overdoing it. After more than a decade of underbuilding, there remains a significant housing shortage overall. However, for prospective homebuyers like you, the rise in new builds can be a game changer as it provides more options for your search.

2. Newly Built Homes May Be More Affordable Than You’d Think

You might still be questioning whether a new build could realistically fit into your plans. If you've previously dismissed the idea, assuming it would be beyond your budget, it's time to reconsider. The price disparity between newly constructed homes and existing ones is narrowing, and here's why.

Builders respond to market demand, and they're aware of the need for more accessible options, particularly smaller and potentially more affordable homes. Consequently, they're directing their efforts towards constructing smaller homes at lower price points. As a result, the gap in prices between new and existing homes is gradually shrinking, as illustrated in the graph below:

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 . . .”

Additionally, some builders are currently offering incentives such as price reductions and mortgage rate buy-downs to make the prospect of purchasing a new build even more appealing. Given these factors, there are numerous reasons why new constructions may merit your consideration. It's evident that other buyers are taking notice, as Freddie Mac aptly notes:

"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."

It's essential to recognize that purchasing a newly constructed home differs from buying an existing one, especially when it comes to the nuances of builder contracts. Therefore, it's highly advisable to collaborate with a local agent who is well-versed in the market dynamics, familiar with builder reputations, and adept at navigating the intricacies of these contracts. Having an expert by your side ensures that you can explore this option with confidence and clarity.

Bottom Line

If you're curious about what builders are currently offering in our area, why not connect with me? Together, we can explore the available options firsthand. Additionally, if you're open to expanding your horizons and widening your search to include neighboring towns, we can discuss strategies for maximizing your options. Let's work together to find the perfect home for you.