Fewer New Home Choices for First-Timers
First-time buyers are struggling to find affordable options in the new-home market. Sales of low-priced new homes dropped in September, with just 2 percent of all new home sales at $150,000, the U.S. Commerce Department reports. That’s down 5 percent from last year.
“Having starter home options for new buyers is really important,” says Danielle Hale, managing director of housing research at the National Association of REALTORS®. But “we do find the majority of first-time buyers tend to buy existing homes, because there aren’t many new homes on the market in the starter home price range.”
Indeed, about 12 percent of existing homes between $150,000 and $199,000 were sold in September, according to NAR. On the other hand, 57 percent of new home sales were in the $200,000 to $399,000 range, according to the U.S. Commerce Department. The median price of a new home was $313,500 in September – 33.9 percent higher than the median price of an existing home ($234,200).
The Commerce Department reported this week that overall sales of newly constructed single-family homes increased 3.1 percent last month month-over-month to a seasonally adjusted annual rate of 593,000 units. The inventory of new home sales was 235,000 in September – a 4.8-month supply at the current sales pace. Regionally, new-home sales rose by the highest amount in the Northeast, increasing 33.3 percent month-over-month, followed by an 8.6 percent increase in the Midwest and a 3.4 percent rise in the South. The West posted a 4.5 percent decrease in new-home sales in September.
Source: “First-Time Buyers Find New Homes to Choose From,” realtor.com® (Oct. 26, 2016) and National Association of Home Builders
Source: NAR – Real Estate News
Fewer New Home Choices for First-Timers
Photo Credit: Garreth Wilcock via Flickr / CC BY-SA 2.0
