When planning a move, it's common to think about the future location and appearance of your new home. You might have a particular image in mind, but if you hadn't considered buying a newly constructed home from the beginning, the idea of new home construction may not have crossed your mind.

A reliable real estate agent can assist you in exploring these two factors that might make you reconsider your decision.

1. Adding Newly Built Homes Could Give You More Options

There are two types of homes available on the market: new homes and existing homes. A newly built home is one that has just been constructed or is currently under construction. On the other hand, an existing home is a property that a previous homeowner has already lived in. Currently, the inventory of existing homes is limited. However, there could potentially be more options available for you in the new home category.

According to data from the Census and the National Association of Realtors (NAR), newly constructed homes are now a more significant portion of the current housing stock compared to historical averages. This trend is illustrated in the accompanying graph.

Since 1983 until 2019, which was the last normal year in the market, newly constructed homes accounted for just 13% of the overall homes available for sale. However, today, that figure has surged to more than 33%.

Rest assured, builders are not overdoing it today after more than a decade of underbuilding. Despite the rise in new construction, there remains a substantial housing shortage overall. However, the increase in new builds can greatly benefit you by providing more options for your search.

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

You may still be considering if a new build could truly be a viable option for you. If you've dismissed this idea before due to budget concerns, it's worth noting that the cost difference between a newly constructed home and a pre-existing one is becoming less significant. Here's the reason why this shift is occurring.

Builders are responding to current demands by constructing smaller, more affordable homes as people seek out additional options. This focus on building smaller homes at lower price points is narrowing the price gap between new and existing homes, as shown in the graph below.

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.”
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— LendingTree

And an article from CNBC says:

““While new builds are still sold for slightly more than existing homes, the price gap has significantly narrowed . . .”
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— CNBC

Not only that, but certain builders are currently providing discounts on prices and lowering mortgage rates to make the offer more attractive. There are several compelling reasons to think about investing in new constructions today. Many other buyers seem to agree. Freddie Mac has stated:

““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.”
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— Freddie Mac

Just be aware that purchasing a newly constructed home differs from buying a pre-existing one. The contracts drawn up by builders come with distinct terms and conditions. It's advisable to collaborate with a knowledgeable local agent who is familiar with the market, builder track records, and the key elements to watch for in these contracts. Having an expert on your team can provide invaluable assistance as you consider this opportunity.

Bottom Line

If you're interested in learning about the current construction projects in our area, let's get in touch and explore them together. Additionally, if you're open to expanding your options, we can discuss widening your search to encompass neighboring towns.