People Want Less Expensive Homes -Builders Are Responding!

In today’s housing market, there are two main affordability challenges impacting buyers: mortgage rates that are higher than they’ve been the past few 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 build homes making up a historically large percentage of the total available inventory today–that search often includes brand new homes.

The graph below uses the lates 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 Matters, explains:

“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 Consulting says, 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 and 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.

If you’re having a hard time finding a home you like in your budget–let’s connect! We can help connect you with a real estate professional who knows all about the latest inventory in your area, and we can help get you pre-approved so you’re ready to go as soon as you find the right place! Call us today at 206-590-2414!