There are two main affordability issues in today’s housing market: rising mortgage rates due to low inventory and rising home prices. Many people are working with agents to find cheaper homes. People are Spending Less On Newly Built HomesThe graph above uses the latest Census data to show that in June, more newly built homes were sold in lower price ranges. In June of this year, the number was 65%. This means that more people are buying newly constructed homes at lower prices right now, while affordability is still a problem. Builders Offer Lower-Cost OptionsBuilders are responding to this trend by offering lower-cost options. George Ratiu is the Chief Economist of Keeping Current Matters. He explains that builders are responding to this trend by bringing smaller homes to the market to meet lower prices. . “New data from the Census confirms this pattern. It shows that the median sales price for newly built homes has dropped in recent months. (See graph below).” And as Mikaela Aroyo, Director of New Home Trends Institute, John Burns Real Estate Consulting says, builders who are most responsive are forming pathways to home ownership: . . It creates opportunities for people to be in a position to afford a starter home in a particular area. . . . If you reduce the size, it will automatically make the home more affordable. The builders who are reducing the size of their homes are likely the ones who are trying to create a more affordable product. If you are looking to buy a house soon, work with a local agent to see what’s on the market in your area. Agents can help you view newly constructed homes or those under construction in your area. Bottom LineIf you are having trouble finding a house that fits your budget, contact a real estate agent. You need a real estate agent who is up-to-date on the latest inventory, including new homes or those still under construction. You will have an expert at your side to provide you with information about builder reputations, contracts, and negotiations.
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