If you're planning to buy a home this spring, you're likely facing the dual challenges of affordability and limited inventory. However, there might be a solution that addresses both issues: newly built homes. Here's why you should consider this option.
New Home Construction: An Inventory Bright Spot
When searching for a home, you have two main choices: existing homes (those already built and previously owned) and newly constructed ones. Despite a slight increase in the number of existing homes for sale this year, the inventory is still lower than in more typical years like 2018 or 2019. If you're looking to expand your options, newly built homes can provide a viable alternative. Danielle Hale, Chief Economist at Realtor.com, notes:
"The shortage of existing homes for sale has opened up the possibility of new-home construction to more buyers who may not have once considered it."
The good news is that there are currently more newly built homes available. Recent data from the Census Bureau shows a significant increase in both housing starts (homes where construction has just begun) and completions (homes that builders have just finished). This means you have a broader range of options, whether you want a move-in ready home or prefer to customize a build from the ground up.
Builders Are Offering Incentives to Help with Affordability
To make new homes more attractive, builders are offering various incentives, such as mortgage rate buy-downs and other perks for homebuyers. These incentives can help mitigate today's affordability challenges and get you into your dream home. Mark Fleming, Chief Economist at First American, explains:
"Builders aren't rate locked-in. They would love to sell you the home because they're not living in it. It costs money not to sell the home. And many of the public home builders have said in their earnings calls that they are not going to be pulling back on incentives, especially the mortgage rate buy-down, so that will help the new-home market continue to perform well in the spring home-buying season."
An article from HousingWire also highlights the trend:
". . . the use of sales incentives still shows some momentum as 60% of respondents reported using them, up from 58% in February."
Partner with a Real Estate Agent
Buying from a builder is different from buying from a homeowner, and it's crucial to partner with a local real estate agent who can guide you through the process. Builder contracts can be complex, and a trusted agent will advocate for you at every step. They'll provide valuable insights on construction quality and builder reputation, help you review and negotiate contracts, advise on worthwhile customizations and upgrades, and much more.
If you're struggling to find a home due to today's affordability challenges and limited inventory, consider newly built homes. They might be the solution you need. Connect with a local real estate agent to explore this option and see how it can benefit your home-buying journey.
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