Sales of New Construction Homes On the Rise
According to the U.S. Census Bureau, sales of new homes rose 4.4% in July 2023. This is an incredible 31.5% increase in new home sales since July of last year. If sales continue at this pace, 714,000 new construction homes will sell within the year. This is the fastest seasonally-adjusted annual rate since February 2022.
A big factor in the rise of new home sales across the country is due to a decline of new listings of existing homes. Existing home sales fell 2.2% in July and were down 16.6% year-over-year according to a recent report by the National Association of Realtors. As of July, there were only 1.1 million existing homes for sale across the country. This is less than half the national average for the years between 1999 and March 2020.
Low Inventory Continues to Impact the Housing Market
Many homeowners are reluctant to sell and give up the low mortgage rates secured in previous years. Fortunately, builders have been filling demand by offering creative financing and building new homes to fill the void. Within California, there are approximately 126 home builders actively building new construction homes and permits for future construction increased in July.
New Construction vs. Existing Home Sale Prices
Many homebuyers mistakenly believe that buying new construction costs more than buying an existing home. While that may have been true five years ago, it isn’t the case anymore. New homes are selling at prices competitive with existing homes. In June, the median new construction home sold for just $6,700 more than the median existing home. A recent study by StorageCafe found that in 18 states, it costs less to purchase a new home verses a comparable preexisting home.
Benefits of New Construction Homes
Many people find new construction homes an attractive option. A new home is often located in a more desirable or up-and-coming neighborhood, where existing homes are scarce. This can attract buyers who want to live in specific areas but can’t find existing properties that meet their needs. New homes typically require less immediate maintenance compared to older homes, which can have outdated systems or wear and tear from previous owners. In California, homebuyers can save thousands in their monthly payments due to higher energy efficiency and lower costs to maintain a new home. New homes are equipped with sustainable features like energy-efficient windows, appliances, HVAC systems, and solar panels. This can provide significant long-term savings through lower utility bills. In the long run, monthly expenses are much lower for a newly built, eco-conscious home.
Investing in a new construction home offers several advantages, making it an excellent option for potential buyers. It is an opportunity to enjoy modern comfort, efficiency, and personalization while minimizing the potential drawbacks of older properties.
Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.