New Home Construction on the Rise

If you're currently in search of a home, you're likely experiencing the impact of limited housing options in today's market. However, don't overlook the tremendous potential offered by newly constructed homes. Amidst the scarcity of available homes for sale, the market for new construction stands out as a beacon of hope. The National Association of Realtors (NAR) acknowledges the challenges faced by homebuyers due to limited housing options during the peak season. Yet, they also highlight the positive trend observed in new home construction.


Momentum in New Residential Completions

A key metric that reflects the surge in new home construction nationwide is new residential completions. These refer to newly built homes that are finished and ready for occupancy. Data from the Census reveals an encouraging trend in new-home completions, with the number of finished housing units aligning with the long-term average.

The graph illustrates how builders exceeded the long-term average (shown in black) prior to the housing crash, resulting in an oversupply of homes and subsequent decline in home values. However, since then, new home construction has fallen short of meeting the historical average (shown in red), leading to a multi-year inventory deficit in the housing market.

On a positive note, the latest Census report shows that builders are currently matching the long-term average (shown in green). This indicates a significant increase in newly built homes entering the market, surpassing recent memory.


Momentum in Residential Starts and Permits

The momentum in new home construction is further evidenced by the rise in residential starts and permits. Residential starts refer to homes where construction has officially commenced, while permits signify homes where builders are planning to break ground soon. The upward trajectory of both these indicators suggests a growing number of newly built homes will be available in the near future.


What This Means for You

The expanding pool of newly constructed homes presents exciting opportunities for prospective buyers like you. Consider the following options based on your preferences and timeline:

  1. Move-in Ready Homes: If you're looking to move promptly and value timing, explore the homes recently completed in your area. These homes are ready for immediate occupancy, offering a convenient solution.

  2. Customization: If you can afford to wait and desire the ability to customize your home from the ground up, inquire about homes under construction in your preferred area. Buying a home in progress allows you to select features and finishings that align with your taste and preferences.


When faced with limited housing inventory, it's crucial to explore the promising realm of new home construction. If you're ready to embark on this journey, connect with us to gain expert guidance on the available options in our area. Together, we can help you navigate the dynamic market and find the perfect home that meets your criteria.


Frequently Asked Questions (FAQs)

  1. Why should I consider new home construction over existing homes? New home construction offers several advantages, including the ability to customize features, modern design and amenities, energy efficiency, and reduced maintenance and repair costs. Additionally, newly constructed homes often come with warranties and are built to meet the latest building codes and regulations.


  2. Are newly constructed homes more expensive than existing homes? While new homes may have a higher upfront cost compared to some existing homes, it's essential to consider the long-term benefits they offer. Newer homes are often more energy-efficient, resulting in lower utility bills. Moreover, the reduced maintenance and repair costs can offset the initial investment.


  3. How long does it take to build a new home? The timeline for constructing a new home can vary based on factors such as the size and complexity of the project, weather conditions, and the builder's schedule. On average, the construction process for a new home can range from a few months to a year. It's advisable to discuss the estimated timeline with your builder or real estate agent.


  4. What should I consider when choosing a builder for my new home? Selecting the right builder is crucial for a successful new home construction experience. It's recommended to research builders in your area, review their portfolios and past projects, read customer reviews, and consider their reputation and experience. Additionally, ensure the builder is licensed, insured, and willing to provide references.


  5. Can I negotiate the price and terms when buying a new construction home? In some cases, there may be room for negotiation when purchasing a new construction home. Factors such as market conditions, builder incentives, and customization options can influence your negotiation power. It's advisable to work with a knowledgeable real estate agent who can guide you through the negotiation process and help you achieve a favorable outcome.


References

  1. National Association of Realtors (NAR) - Home Buyers Struggle with Limited Housing Options

  2. Census Bureau - New Residential Construction Data

  3. Investopedia - Curb Appeal Definition and Importance

  4. Zillow Research - Senior Economist Jeff Tucker on Home Pricing

  5. National Association of Home Builders (NAHB) - Why Buy New