There is currently a trend going on in the real estate sector: more and more buyers are opting for new-build homes. And it’s not just about getting the latest technology or modern floor plans. Because they might be able to get a better deal.
Builders are offering serious incentives these days, and people are jumping on them. In reality, sales of new houses have just reached their highest level in more than two years (see graph below):
Why Builders Add Perks
There are currently more new construction homes for sale than there have been in years. And as a buyer, that can help you in two big ways. It gives you more options to choose from in the market, and it motivates builders to sell their inventory before building more.
That’s exactly why more buyers are scoring such incentives:
- Purchase of mortgage interest to reduce your monthly payment
- Price reductions making home ownership more feasible
- Assistance with closing costs and even upgrades in some communities
The best part is that many builders are currently offering these benefits. According to Unpleasant Zondaalmost Six in ten new residential communities participate in incentives for homes yet to be built. And more than 75% do the same for quick movesthese are homes that have already been built and are ready to move into. As real estate analyst Nick Gerli explains:
“. . . builders are adapting to the realities of today’s housing market. They have reduced prices by 13 percent from peak, and are offering generous mortgage rate waivers on top of that.”
The big conclusion is: builders are motivated to sell. So you can get a lower price and maybe even a lower mortgage interest rate if you buy a new one. If you feel like you’re being overpriced, these deals may be your way back in.
You have more brand new options than usual
Because more new-build homes are coming onto the market than normal, this gives you more options than you have had in years. Whether you’re looking for something out-of-the-box or want to customize a build, chances are there’s more available in your area than you might realize.
Even though the number of new homes for sale has increased across the country, there are pockets where you can find a even better chance to find a better price. According to Census factshere’s a high-level overview of which parts of the country are seeing the biggest increases in new home construction (see graph below):
There are more new homes available in both the South and the West, so builders in these regions may be even more willing to negotiate.
Just know that this opportunity won’t last forever. Recent data shows that builders are slowing their production efforts. And a large part of this is intended to prevent too many houses for sale. As Robert Dietz, chief economist at the National Association of Home Builders (NAHB), explains:
“The slowdown in single-family home construction has reduced the residential construction pipeline. There are currently 621,000 single-family homes under construction, down 1% in July and down 3.7% from a year ago. This is the lowest level since early 2021, as builders pull back supply.”
In the future, the number of new options could decrease as builders focus more on selling what’s already built before adding more. So the best time in years to get one new house can really be like that now.
In short
While builders reduce prices And it may even help you achieve a lower monthly payment, that’s not something to overlook.
If you want to see how active builders are in your target area and what they have to offer, this is your powerful move: Before you even start looking, you should contact your own agent.
That way, you’ll have someone to help you compare multiple builders’ incentives and negotiate on your behalf to ensure you get the reward the best possible deal.
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