In a surprising shift, new construction homes are making a strong case for affordability in today’s housing market. Nearly one-third of homes currently for sale are newly built, offering a compelling alternative to older properties. This surge in new construction stems from builders’ keen awareness of affordability concerns and their adaptation to evolving market conditions.
Cliff Johnson, vice president of new homes and rentals at Realtor.com, highlights the scarcity of existing homes as a key driver of their price increases. “Builders have seen the affordability issue on the horizon for quite some time,” Johnson explained in a Realtor report. “Many have adapted and responded with more reasonably priced homes.”
This shift in focus has led to a wave of attractive incentives from builders eager to secure buyers. The recent spike in mortgage rates, fueled by the Federal Reserve’s rate hikes, had initially deterred some potential homebuyers. In response, builders are offering enticing deals that translate into real savings for buyers. These incentives can include covering portions of closing costs, providing free upgrades on materials, or even directly reducing mortgage rates. Such offers can significantly reduce the overall cost of a new home, making it a more accessible option for many.
Timing plays a crucial role in securing the best deals on new construction. Builders often incentivize early purchases in developments that are still under construction. Additionally, the colder months, when builders experience a slower pace, can yield better bargains.
Bob Seeman, vice president of sales for new homes at Realtor, emphasizes the end of a builder’s fiscal year as a prime opportunity for buyers. “They want to show strong results for the whole year,” Seeman explained. “Once the summer buying season has ended, the incentives are often in place to extend that buying season.”
However, experts caution against getting carried away with upgrades that could inflate the final price. Christina McCollum, a producing market leader at Churchill Mortgages, advises buyers to prioritize their needs over wants and make selections that align with their budget. “Ultimately, you need to understand the difference between wants and needs and make selections that work for your budget,” McCollum said.
Working with an experienced real estate agent can significantly benefit those considering new construction. Agents can provide valuable insights into which elements might be most negotiable and at what point in the development cycle. They can also help navigate the complexities of the construction process and ensure that the final product meets the buyer’s expectations.
As the housing market continues to evolve, new construction homes are becoming an increasingly attractive and accessible option for many buyers. With strategic timing, negotiation skills, and the guidance of a skilled real estate agent, homebuyers may find themselves closer than ever to owning a brand-new home.
