Newly built single-family homes are making waves, claiming nearly one-third of the housing market.
Seems like the industry is all in, ramping up construction and offering compelling incentives to attract eager buyers. With existing homes in short supply, more folks are turning to the new-home scene for a wider range of options. And get this—lots of current homeowners are holding onto their properties, not willing to let go of those sweet, low mortgage rates from a few years back, even with today’s higher rates. Typically, new-home sales contribute a modest 10% to the market. But hold on tight—projections from the National Association of REALTORS® hint at a 12.3% surge this year, with an even more enchanting 13.9% on the horizon for 2024. What’s the secret sauce, you ask? It’s a blend of increased construction buzz and incentives crafted to charm prospective buyers.
Eager to explore the allure of the new home scene? Dive into this week’s edition for an exclusive peek at the housing revolution. In the second quarter of this year, a substantial proportion of the housing market was dominated by newly constructed single-family homes, reaching an unprecedented level of nearly one-third of the national housing inventory, as revealed by recent research conducted by Redfin. In contrast, conventional wisdom holds that new-home sales typically contribute merely 10% to the overall market.
Projections from the National Association of REALTORS® indicate an anticipated surge of 12.3% in new-home sales for the current year, followed by an even more robust 13.9% in 2024. This optimistic outlook is fueled by an industry-wide commitment to increased construction activity and strategic incentives designed to entice prospective buyers. Faced with the historically low availability of existing homes, a growing number of purchasers are redirecting their focus toward the new-home sector, seeking a broader array of choices. Concurrently, a considerable percentage of existing homeowners are exhibiting reluctance to part ways with their properties, reluctant to trade their secured low mortgage rates from a few years ago for today’s higher rates.
Shauna Pendleton, a seasoned real estate agent at Redfin in Boise, Idaho, underscores this shift, noting, “For many buyers, new construction stands as the sole viable option. With concerns about potential price increases, a significant portion of buyers is eager to secure a home promptly. The abundance of new construction, coupled with enticing perks, makes it an increasingly attractive prospect.” Notably, Redfin’s report highlights Boise, where new homes constituted nearly 40% of the single-family inventory during the second quarter.
In the effort to stimulate sales, a noteworthy 55% of home builders acknowledge employing various incentives, according to data derived from the National Association of Home Builders/Wells Fargo Housing Market Index. These incentives span from reducing mortgage rates to providing additional perks such as complimentary home upgrades. Approximately 25% of builders have opted to decrease their prices, with an average decline of around 6%, according to the survey results.
This looks good for new homes! Make sure you are well equipped with a great team to back you with your projects and clients! Contact us for any additional information.
