Do you think a brand-new home means a bigger price tag? Think again.
Right now, something unique is happening in the housing market. According to the Census and the
National Association of Realtors (NAR), the median price of newly built homes is actually lower than the
median price for existing homes (ones that have already been lived in):
You read that right. That brand new, never-been-lived-in house may cost less than the one built 20 years
ago in a neighborhood just down the street. So, if you wrote off a new build because you assumed they’d
be financially out of reach, here’s what you should know. You could be missing out on some of the best
options in today’s housing market.
Why Are Newly Built Homes Less Expensive Right Now?
1. Builders Are Building Smaller Homes
Builders know that buyers are struggling with affordability today. So, instead of building big houses that
may not sell, they’re building smaller ones that will. According to the Census, the average size of a
newly built single-family home has dropped considerably over the past few years (see graph
below):
And as size goes down, the price often does too. Smaller homes use fewer materials, which makes them
less expensive to build. That helps builders keep prices lower so more people can afford them.
2. Builders Are Offering Price Cuts and Incentives
In May, according to the National Association of Home Builders (NAHB), 34% of builders lowered their
prices, with an average price drop of 5%. That’s because they want to be sure they’re selling the
inventory they have before they build more.
On top of that, 61% of builders also offered sales incentives – like helping with closing costs or
buying down your mortgage rate. These are all ways builders are making their homes more affordable, so
these homes sell in today’s market.
Your Next Step? Ask Your Agent What’s Available Near You
If you’re trying to buy a home right now, be sure to talk to your agent to find out what builders are doing in
and around your area. They can find new home communities, as well as builders who are offering
incentives or discounts, and hidden gems you might not uncover on your own.
Plus, buying a newly built home often means there are different steps in the process than if you purchase
a home that’s been lived in before. That’s why it’s so important to have your own agent who can explain
the fine print. You want a pro in your corner to advocate for you, negotiate on your behalf, and make sure
your best interests come first.
You could get a home that’s brand new, with modern features, at a price that’s even lower than some
older homes. Talk with a local real estate agent about what you’re looking for and see if a newly built
home is the right fit for you.