Is a Newly Built Home Right for You?
If you’re thinking about buying a home, you might be focusing on previously owned ones. With so few houses for sale today, it makes sense to consider all your options, including newly built homes.
The Number of Newly Built Homes Is on the Rise
While there are more houses for sale right now in the greater Kansas City area than there were at this time last year, there’s still a historically low number of homes available on the market. Some of the reasons for this low availability is the under-construction of homes in the past number of years. There haven’t been enough new homes built to keep up with demand.
The graph above shows how low the production of newly constructed homes has been over the past 14 years. Positively, it also shows another important trend: the number of new homes being built each year is on the rise. 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 is a growing number of new homes for sale, builders are slowing their pace 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.”
Many builders are now offering incentives to help buyers purchase these homes. 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.”
Builders 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.”
Should You Buy a Brand-New Home?
If you need help deciding the best home type for you, give the Just Say Home KC Team a call at 816-656-2816. We can help you weigh the pros and cons of each option. We are experts in the Kansas City housing market, and we know which builders might be offering incentives which make sense for you.
Even though home supply is low, new home inventory is on the rise, and many builders are offering incentives. Connect with us today so the Just Say Home KC Team can help you choose your dream home.