'12-Month Low' New-Home Prices Have Fallen
Get One While You Can: For years, all home buyers have heard is that prices are going up, up, and away. But the cost of buying a newly constructed abode has fallen to its lowest price point of the last 12 months. So if you've been wanting to buy a home that's never been touched by another owner, we give you permission do a happy dance.
The median price of a new home ped nearly 6.9% from March to April to reach $312,400, according to a joint report by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. That was only up 0.4% from April 2017, less than inflation.
This could be a sign that builders are trying to build at lower price points,' says Chief Economist Danielle Hale. That would be a boon to the many would-be homeowners, particularly first-time buyers or those on a tight budget, who are being priced out of the market. 'The largest share of home buyers and home shoppers in the market are looking to buy entry-level homes.'
Hale pointed out that 5% of new-home sales were for abodes priced under $150,000. That may not sound like much, but it's the largest share we've seen at that super-desirable price point since August 2016.
However, new homes were still about 24.8% more expensive than the $250,400 median cost of an existing home (one that has previously been lived in), according to the most recent data available from the National Association of Realtors®.
That's because new homes have pricier finishes and appliances, with no wear and tear on anything. Plus, land, labor, and building materials costs have been on the rise.
Meanwhile, the number of new homes sold and for sale dipped 1.5% from the previous month to about 662,000, according to the report. They rose, however, 11.6% from the same month a year earlier.
(Realtor.com® looked only at the seasonally adjusted numbers in the report. These have been smoothed out over 12 months to compensate for ups and downs at certain times of year.)
The Midwest saw the biggest annual bump in the number of homes sold or for sale in April. About 91,000 home hit the market or were closed on in April, rising a whopping 26.4% from the same month a year earlier, but remaining flat from the previous month.
The West came in second, with a 18.9% year-over-year rise. But the 176,000 abodes for sale or sold were down 7.9% from March.
In the South, the 355,000 homes on the market or changing hands were up 6% annually and increased 0.3% from the previous month. In the Northeast, the number was up 5.3% year-over-year and 11.1% month-over-month, with 40,000 new homes.
'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,' Freddie Mac Deputy Chief Economist Len Kiefer said in a statement.
'As long as single-family home construction remains at a low level, so too will new home sales.'
Are you Ready to Buy or Sell? If you’re interested on a wealth of information and 18 years of experience to help you get started visit us at Precision Realty & Assoc. LLC or if you prefer a more personal touch, CALL 801-809-9866 today.
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