Why a Newly Built Home Might Be the Move Right Now

Are you looking for better home prices, or even a lower mortgage rate? You might find both in one place: a newly built home. While many buyers are overlooking new construction, it could be your best opportunity in todays market. Heres why.

There are more brand-new homes available right now than there were even just a few months ago. According to the most recent data from the Census and the National Association of Realtors (NAR), roughly 1 in 5 homes for sale right now is new construction. So, if youre not looking at newly built homes, youre missing out on a big portion of whats available.

And with more new homes on the market, builders are motivated to sell their current inventory. As a result, many are taking steps to draw in buyers.

Builders Are Cutting Prices

According to Buddy Hughes, Chairman of the National Association of Home Builders (NAHB):

Almost 40% of home builders reduced sales prices in the last month . . .

That means builders are being realistic about todays market and adjusting to what buyers can afford. Its their way to keep their inventory moving.

So, builders may be more willing to negotiate price than youd expect and that means your dollar may go further if you buy a newly built home. Lean on your agent to see whats available and what incentives builders are offering in and around your area.

Builders Are Offering Lower Mortgage Rates

Heres something most people dont know. Right now, buyers of brand-new homes often get better mortgage rates than buyers of existing homes.

Thats because many builders are also offering rate buydowns to make their homes more attractive and keep sales moving. Basically, theyre willing to chip in to lower your rate, so youre more likely to buy one of their homes.

Data from Realtor.com shows, in 2023 and 2024, buyers of newly built homes got a mortgage rate around half a percent lower compared to those who bought existing homes (see graph below):

That kind of savings adds up and makes a big difference when youre figuring out your monthly budget.

So, if you havent found something you love yet, its time to add newly built homes to your search. You may find that what youve been looking for is already out there, its just in a new home community.

Bottom Line

More choices, the potential to negotiate on the price, and maybe even better mortgage rates make these options a bright spot in todays housing market.

If you havent considered a newly built home yet, whats holding you back?

Talk to a local real estate agent about whats available and if a newly built home makes sense for you.