CHICAGO – June 4, 2018 – Homebuyers seeking something brand new may be able to score a deal. Although real estate prices have been on the rise generally, there are exceptions, and the cost of buying new construction has fallen to its lowest point in the past 12 months, realtor.com reports.
The median price of a new home fell nearly 6.9 percent from March to April, reaching $312,400, the Commerce Department reported last week. The price is up just 0.4 percent from a year ago.
"This could be a sign that builders are trying to build at lower price points," says Danielle Hale, realtor.com's chief economist, which would be welcome news to first-time buyers and home shoppers who are on a tight budget. "The largest share of homebuyers and home shoppers in the market are looking to buy entry-level homes," she adds.
Five percent of new-home sales were for properties priced under $150,000 in April – the largest share since August 2016, Hale notes.
The prices may be coming down a bit, but the cost of a new home is still more than purchasing an existing home. New homes remain about 24.8 percent more expensive than the $250,400 median cost of an existing home, according to the National Association of Realtors®.
Plus, buyers may be hard-pressed to find enough choices in the new-home sector.
"The absolute level of [new-home] sales remains quite low compared to current demand levels and the overall population. But you can't sell what hasn't been built," said Freddie Mac's Len Kiefer in a statement. "As long as single-family home construction remains at a low level, so too will new home sales."
Source: "Get One While You Can: New-Home Prices Have Fallen to a 12-Month Low," realtor.com® (May 23, 2018)
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