Top Two Reasons to Consider a Newly Built Home

When you are planning a move, it is natural to wonder where you will end up and what your new home will look like. Perhaps you have a specific image of that house in your mind. However, unless you went into this process knowing you wanted to buy a newly built home, you may not have considered new home construction.

A trusted real estate agent can walk you through these two reasons why you should reconsider.

1. Adding Newly Built Homes Could Give You More Options

There are two types of homes on the market: new and existing. A newly built home refers to a house that was just built or is under construction. An existing home has previously been occupied by a homeowner. The existing home inventory is currently low. But there may be options for you on the new home side of things.

Data from the Census and the National Association of Realtors (NAR) shows that newly built homes are a bigger part of today’s housing inventory than the norm (see graph below):

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From 1983 to 2019 (the last normal year in the market), newly built homes made up only 13% of the total inventory of homes for sale. But today, that number has climbed to over 33%.

Rest assured, after over a decade of underbuilding, builders aren’t overdoing it today. Even with an increase in new construction today, there’s still a significant housing shortage overall. However, for you, the increase in new builds can be a game changer because it provides more options for your search.

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

You may still be wondering whether a new build is a viable option for you. Consider this if you have previously dismissed them as being too expensive. The price difference between a newly built home and an existing house is narrowing. Here's why.

Builders are going to build what’s in demand. And they know people need more options right now, especially ones that are smaller and potentially more affordable. So, they’re focusing on building smaller homes at lower price points. The graph below shows the price difference between new and existing homes is shrinking as that happens:

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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, some builders are even offering price cuts and mortgage rate buy-downs right now to sweeten the deal. Today, there are many reasons new builds may be worth considering. Other buyers sure seem to think so. As Freddie Mac says:

"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."

Just know that buying a newly built home isn’t the same as buying an existing one. Builder contracts have different fine print. So, partner with a local agent who knows the market, builder reputations, and what to look for in those contracts, so you have an expert on your side to help you explore this option.

Bottom Line

If you want to know what builders are doing in our area, let us get together and check it out. And, if you are willing to cast a wider net to increase your options, we can discuss expanding your search to include other nearby towns.

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