Lisa Mailhot | August 17, 2023
In the current real estate landscape, two primary challenges affecting potential buyers are elevated mortgage rates compared to previous years and the escalating prices of homes due to limited inventory. To tackle these obstacles, numerous individuals are collaborating with their real estate agents to explore more cost-effective housing options. The current market also showcases many newly constructed homes, enabling buyers to consider brand-new residences.
Recent data sourced from the Census, as illustrated in the graph below, reveals that a higher percentage of newly built homes sold in lower price ranges in June compared to the preceding year:
In 2022, just 58% of newly constructed homes were sold for less than $500,000, while this June witnessed a surge to 65%. This trend reflects a growing preference for economically viable newly built homes amidst ongoing affordability challenges.
Builders have adeptly identified this evolving demand and are adapting their strategies accordingly. George Ratiu, Chief Economist at Keeping Current Matters, highlights:
“Builders are also responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points . . .”
Recent Census data reinforces this trend, showcasing a decline in the median sales price of newly built homes in recent months, as indicated in the graph below:
Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, emphasizes that builders most responsive to this shift are fostering pathways to affordable 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.”
Builders' efforts to offer smaller, more budget-friendly newly constructed homes provide buyers with increased affordable choices during a crucial time. If you're in the market for a new home, consider partnering with a local real estate agent to explore available options in your vicinity. Agents can assist you in evaluating newly built homes or those currently under construction nearby.
If you're encountering challenges in finding a home within your budget, reach out to us. You deserve a real estate professional who possesses comprehensive knowledge of the latest inventory in our region, including homes in various stages of construction. With an expert on your side, you gain valuable insights into builder reputations, contract negotiations, and other essential aspects of the home buying process, ensuring a seamless experience.
Stay up to date on the latest real estate trends.
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