When it comes to making a purchase, whether it’s clothes, sneakers, or a car, new items typically come with a higher price tag than used ones.
For those of us who came of age before the internet era, you may have shopped at vintage stores, flea markets, or estate sales to find a good deal without paying full price for something brand new.
Historically, that same logic has applied to housing. An existing home built in the 1980s may not feature the latest design trends and may require a few repairs, such as replacing the carpet, updating the cabinets, or installing new windows or an HVAC system.
A newly built home, on the other hand, typically doesn’t come with those concerns. It is move-in ready from day one. But today’s market is showing a rare shift. For five consecutive months, the median price of existing homes has been higher than that of new construction, according to recent data from the National Association of Home Builders.
So what is driving this unusual price flip? For starters, elevated interest rates over the past few years have prompted builders to scale back, focusing on smaller, more attainable homes such as townhomes rather than large five-bedroom houses.
Builders are also turning to price cuts and buyer incentives to move their inventory. A surplus of unsold homes can weigh on profits, so many larger builders are reducing prices or offering perks such as covering closing costs and providing mortgage rate buy-downs. These offers can be especially appealing for buyers looking to take that first step into homeownership.
If you are in the market to buy right now, new construction could present a valuable opportunity. With today’s market conditions and the help of an experienced REALTOR®, you may be able to secure a great deal that not only saves you money up front but also sets you on the path to building equity for years to come.
Collyn Wainwright is president of Greater Nashville Realtors. A Realtor is a member of the National Association of Realtors who subscribes to its strict code of ethics. You can reach Collyn at 615-383-6964 or collyn@collyn.com.
