Leave a Message

Thank you for your message. We will be in touch with you shortly.

People Want Less Expensive Homes – And Builders Are Responding

August 16, 2023

 

In today’s housing market, there are two main affordability challenges impacting buyers: mortgage rates that are higher than they’ve been the past couple of years, and rising home prices caused by low inventory. To overcome those challenges, many people are working with their agents to find less expensive homes. And with newly built homes making up a historically large percentage of the total available inventory today, that search often includes brand new homes.

 

People Are Spending Less on Newly Built Homes

 

The graph below uses the latest information from the Census to show, in June, more of the newly built home sales in this country were in lower price ranges than in 2022:

 

 

Last year, only 58% of newly built home sales were less than $500,000. This June, that number was up to 65%. This means more people are buying less expensive newly built homes right now while affordability remains a challenge.

 

Builders Are Offering Lower-Cost Options

 

Builders have picked up on this trend and are reacting accordingly. George Ratiu, Chief Economist at Keeping Current Mattersexplains:

 

  "Builders are also responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points . . ."

 
New data from the Census further confirms this pattern – it shows the median sales price of newly built homes has dipped down in recent months (see graph below):
 
 
And as Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consultingsays , the builders who are most responsive to this trend are forming pathways to 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."

 

How an Agent Can Help

 

Builders producing smaller, less expensive newly built homes give you more affordable options at a time when that’s really needed. If you’re hoping to buy a home soon, partner with a local real estate agent to find out what’s available in your area. An agent can help you look at newly built homes or ones under construction nearby.

 

Bottom Line

 

If you’re having a hard time finding a home you like in your budget, connect with a real estate professional. You need an agent who knows all about the latest inventory in your area, including homes still under construction or just built. That way you have an expert on your side who can provide information on builder reputations, builder contracts and negotiations, and more to help you with the homebuying process.


Recent Blog Posts

How Today’s Mortgage Rates Impact Your Home Purchase

September 26, 2023

Mortgage rates directly impact the monthly payment you’ll have on the home you purchase.

Homeowners Have a Lot of Equity Right Now [INFOGRAPHIC]

August 31, 2023

If you’ve been in your home for a while, you might have gained a considerable amount of equity, too.

How Inflation Affects the Housing Market

August 30, 2023

Here’s a high-level overview of the connection between the inflation and housing market.

Buyer Traffic Is Still Stronger than the Norm

August 29, 2023

The latest data shows plenty of buyers are still out there, and they’re purchasing homes today.

Gen Z: The Next Generation Is Making Moves in the Housing Market

August 28, 2023

Here’s some information you may find helpful on why and where your peers are buying.

More Jobs and Better Pay Leads to More Buyer Demand

August 23, 2023

If you’re thinking about selling your house, a strong job market, growing wages, and the resulting buyer demand is fantastic news.

Don’t Expect a Wave of Foreclosures [INFOGRAPHIC]

August 17, 2023

Since most are paying on time, a wave isn’t coming.

People Want Less Expensive Homes – And Builders Are Responding

August 16, 2023

More people are buying less expensive newly built homes right now while affordability remains a challenge.

Don’t Expect a Flood of Foreclosures

August 15, 2023

There aren’t many homeowners who are seriously behind on their mortgage payments.

Work With Us

We’re here to work alongside you to help you make informed decisions when buying or selling your home or investment. Contact us to get started today.