What's my home worth?

Enter your information and I'll get right back to you with a free home estimate.
Find out!
check

Sent

What's my home worth?

Enter your information and I'll get right back to you with a free home estimate.
Find out!
check

Sent

Terri Gold

Find Your Dream Home

People Want Less Expensive Homes – And Builders Are Responding

August 17, 2023


by Keeping Current Matters

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.


Tags:

Featured Listings

sold
Gorgeous NEW CONSTRUCTION in the heart of Farragut! This upscale 2 story basement home features an open design with timeless style. Vaulted ceilings & Master on Main w/ walk-in shower, soaking tub, and his/hers WIC, 4 bedrooms w/ WIC plus bonus room..
$1,095,000
sold
4
beds
2
baths
3,427
Sq Ft
sold
A One of a Kind, Once in a Lifetime home. This hand hewn and self-built house is a work of art and a masterpiece of craftsmanship. Over 27 years, the builder, who was a Broadway and Clarence Brown Theater designer, handcrafted this hardwood Posts...
$560,000
sold
3
beds
2
baths
3,202
Sq Ft
sold
LISTING AGENT IS OWNER/SELLER Gorgeous Farragut brick home on Cul-De-Sac that overlooks the 14th fairway of the Fox Den Golf Course. AquaGuard flooring throughout the first floor. Separate staircase leads to the bonus room/5th bedroom...
$800,000
sold
4
beds
4
baths
3,270
Sq Ft
sold
Don't miss this opportunity to make this gorgeous two story basement, located in Farragut with an amazing open floor plan yours! Zoned for Farragut schools. Main level includes hardwood floors throughout, master bedroom with custom shelving...
$674,900
sold
3
beds
4
baths
2,773
Sq Ft

Recent Posts