People Want Less Expensive Homes – And Builders Are Responding
There are two main affordability challenges impacting buyers in the current Kansas City housing market: high mortgage rates and rising home prices due to low inventory. With mortgage rates higher than in recent years, many people are working with real estate agents to overcome these challenges and find less expensive homes. With newly constructed homes making up a historically large percentage of the total available inventory today, this search often includes brand-new homes.
People Are Spending Less on Newly Built Homes
In June, more newly built home sales were in lower price ranges than last year. The graph below uses the latest information from the Census to show this change.
In 2022, only 58% of newly built home sales were less than $500,000. Currently, that number is up to 65%. What does this mean? While affordability remains challenging, more people are buying less expensive newly built homes.
Builders Are Offering Lower-Cost Options
Builders have noticed 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 the median sales price of new construction homes has dropped within recent months (see graph below):
As Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, says, the builders most responsive to this trend are creating 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 Can a Real Estate Agent Help?
Since builders are producing smaller and less expensive homes, you have more affordable options during a much-needed time. Are you hoping to buy a home soon? Partner with our real estate agents at Just Say Home KC to discover what’s available in the Kansas City area. Our real estate experts know of numerous newly built homes, ones under construction nearby, and even homes not publicly listed on the MLS!
Are you having difficulty finding your ideal home within your budget? The Just Say Home KC Team is deeply connected in the Kansas City area and knows all about the latest inventory, including homes still under construction or recently built. With our qualified agents by your side, you’ll have insight into builder reputations, consistent help navigating builder contracts and negotiations, and everything else you need to help you buy a home!