Should You Buy a Brand New Home?

If you're in the market for a new home, you might be thinking about buying a pre-owned one. However, with the limited number of houses available for sale right now, it's a good idea to consider all your options, including newly built homes.

The Number of Newly Built Homes Is on the Rise

Over the past 14 years, there hasn't been enough new home construction to keep up with demand, which has resulted in historically low inventory levels. But the good news is that the number of newly built homes is on the rise, as shown in the graph below:

As Mark Fleming, Chief Economist at First American, shares, that’s good news for buyers:

“While existing-home inventory remains limited, the silver lining for home buyers is that new-home inventory is on the rise, and a new home at the right price is a pretty good substitute.”

Builder Incentives Can Provide a Boost

While there are more newly constructed homes for sale, builders are slowing down the pace of building until they sell more of their current inventory. 

According to Logan Mohtashami, Lead Analyst at HousingWire:

“The builders have to work off the backlog of homes, but instead of 3%-4% mortgage rates, they’re dealing with 6% plus mortgage rates, which means they have to provide many incentives to make sure those homes sell.”

However, many builders are offering incentives to entice buyers. Fleming also explains:

“The National Association of Home Builders reported that nearly two-thirds of builders were offering incentives, including mortgage rate buydowns, paying points for buyers and price reductions, which could entice potential home buyers.”

A builder who’s willing to pay to reduce your mortgage rate could be a game changer. Ksenia Potapov, Economist at First American, puts it this way:

“A one percentage-point decline in mortgage rates has the same impact on affordability as an 11 percent decline in house prices.”

So, Should You Buy a Brand New Home?

To decide whether to buy a newly built home or a pre-owned one, it's best to work with a trusted real estate professional who knows the local market and can help you weigh the pros and cons of each option.

So, even though there aren't a lot of homes for sale right now, there are more newly built homes available than in the past, and many builders are offering incentives. Contact us, and we can help you determine if a new home is the right choice for you.

Graham Team Real Estate • (702) 930-9551 • Team@grahamteamnv.com

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980 American Pacific Dr. Ste. 111 Henderson, NV 89014