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Are New Homes Going to Be Available to Buy This Year?

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In today’s economy, everyone seems to be searching for signs that a recovery is coming soon. Many experts agree that it may actually already be in motion or will be starting by the 3rd quarter of this year. With the housing market positioned to lead the way out of this recession, builder confidence might be a bright spark that gets the recovery fire started. The construction of new homes coming right around the corner is a huge part of that effort, and it may drive your opportunity to make a move this year.

According to the National Association of Home Builders (NAHB): 

“New home sales jumped in May, as housing demand was supported by low interest rates, a renewed household focus on housing, and rising demand in lower-density markets. Census and HUD estimated new home sales in May at a 676,000 seasonally adjusted annual pace, a 17% gain over April.” 

In addition, builder confidence is also rising, opening up opportunity for newly constructed homes in the market. The NAHB also notes:

“In a sign that housing stands poised to lead a post-pandemic economic recovery, builder confidence in the market for newly-built single-family homes jumped 21 points to 58 in June, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Any reading above 50 indicates a positive market.”

As noted above, this upward trend is supported by builders reporting an increase in demand for single-family homes in suburban neighborhoods with lower-density populations, a result of the COVID-19 health crisis.

Moreover, the most recent Monthly New Residential Construction Report from the U.S. Census indicates that authorized building permits for new residential construction increased by 14.4% month-over-month from April to May, and housing starts were also up 4.3% over the same time period. (See graph below):Are New Homes Going to Be Available to Buy This Year? | Simplifying The MarketAlthough housing permits and starts are both considerably lower than they were at this time last year, indicating the new construction market is still working on building its way back up, the trends are moving in the right direction when it comes to having an impact on the U.S. economy. They’re also poised to create the much-needed new homes for Americans to purchase in a time when inventory is so scarce.

Dean Mon, Chairman of the NAHB notes:

“As the nation reopens, housing is well-positioned to lead the economy forward…Inventory is tight, mortgage applications are increasing, interest rates are low and confidence is rising. And buyer traffic more than doubled in one month even as builders report growing online and phone inquiries stemming from the outbreak.”

The gap between homes to buy and the high demand from purchasers may be narrowed by new construction, and the data shows that these homes are on their way into the housing market.

So, if you’ve debated whether or not to sell your house this year because you’re not sure where to move, a newly-built home – designed to your specific liking – may be your answer.

Bottom Line

With new residential construction right around the corner, you can feel confident about selling your house and having a place to move into. Maybe it’s time to finally design the home you’ve always wanted. Let’s connect today to discuss selling your house while demand from eager buyers is high.

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Buying Tips

Understanding Today’s Mortgage Rates: Is 3% Coming Back?

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A lot of buyers are pressing pause on their plans these days, holding out hope that mortgage rates will come down – maybe even back to the historic-low 3% from a few years ago. But here’s the thing: those rates were never meant to last. They were a short-term response to a very specific moment in time. And as the market finds its footing again, it’s time to reset expectations.

Back in 2020 and 2021, 3% mortgage rates gave buyers a serious boost: more affordability, more buying power, and more opportunity. But those rates were a result of emergency economic policies during the height of a global pandemic. Now that the economy is in a different place, we’re seeing mortgage rates in the high 6% to low 7% range.

And while experts currently project a slight easing in the months ahead, most industry leaders agree: rates are not going back to 3%.

Instead, many forecasts suggest mortgage rates will settle in the mid-6% range by the end of the year, pending any major economic shifts. As Kara Ng, Senior Economist at Zillow, says:

“While Zillow expects mortgage rates to end the year near mid-6%, barring any unforeseen shocks, that path might be bumpy.”

What Buyers Should Know

Basically, waiting for 3% rates might mean waiting longer than you’d expect – and missing out along the way. Instead of putting off homebuying indefinitely, make a plan to get there and focus on what you can control: your budget, your credit, and working with a trusted professional who can explain exactly what’s happening in the current market – and how to navigate it.

Your local real estate agent and a trusted lender make all the difference in this process. The experts have insights into down payment assistance programs, alternative financing options, negotiation strategies, and overall – the experience you need on your side to understand creative ways that will make your plans work.

And here’s the biggest thing to keep in mind. Since rates are projected to ease slightly later this year, if that happens, it could bring some more buyers back into the market. Acting now gives you a head start, especially with more homes on the market than we’ve seen in years.

Think about it: if mortgage rates do come down, what do you think everyone else is going to do? That’s right – they’ll jump back in too.

Getting ahead of that rush could put you in a stronger position to find the right home with less competition. Realtor.com sums it up well:

“Staying out of the market in hopes of a rate drop that never comes can lead to missed opportunities . . . Rising home prices, rent increases, and inflation might outpace any future savings on interest. And if rates do fall sharply again, buyers could face an entirely different challenge: surging competition.”

Bottom Line

Those 3% rates everyone remembers from a few years ago were the exception, not the rule.

Now that they’re settling into new territory, it’s a good time to adjust your expectations and learn more about where things are heading as this market shifts.

A local real estate agent and a trusted lender will be your best resources, always keeping you up-to-date and informed, so you can make sense of your options and build a game plan that works for you.

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Economy

Why Buying Real Estate Is Still the Best Long-Term Investment

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Lately, it feels like every headline about the housing market comes with a side of doubt. Are prices going up or down? Are we headed for a crash? Will rates ever come down? And all the media noise may leave you wondering: does it really make sense to buy a home right now?

But here’s one thing that doesn’t get enough airtime. Real estate has always been about the long game. And when you look at the big picture, not just the latest clickbait headlines, it’s easy to see why so many people say it’s still the best investment you can make – even now.

According to the just-released annual report from Gallup, real estate has been voted the best long-term investment for the 12th year in a row. That’s over a decade of beating out stocks, gold, and bonds as America’s top pick.

a graph of different colored squaresAnd this isn’t new. Real estate usually claims the #1 title. But here’s what’s really interesting. This year’s results came in just after a rocky April for the stock and bond markets. It shows that, even as other investments had wild swings, real estate has held its ground. That’s likely because it gains value in a steadier, more predictable way. As Gallup explains:

“Amid volatility in the stock and bond markets in April, Americans’ preference for stocks as the best long-term investment has declined. Gold has gained in appeal, while real estate remains the top choice for the 12th consecutive year.”

That says a lot. Even though things may feel a bit uncertain in today’s economy, real estate can still be a powerful investment.

Yes, home values are rising at a more moderate pace right now. And sure, in some markets, prices may be flat in the year ahead or even dip a little – but that’s just the short-term view. Don’t let that cloud the bigger picture.

Real estate has a long track record of gaining value over time. That’s the kind of growth you can count on, especially if you plan to live in that home for a long time.

That’s part of why Americans continue to buy-in to homeownership – even when the headlines may sound a little uncertain. As Sam Williamson, Senior Economist at First American, says:

“A home is more than just a place to live—it’s often a family’s most valuable financial asset and a cornerstone to building long-term wealth.”

Bottom Line

Real estate isn’t about overnight wins. It’s about long-term gains. So, don’t let the uncertainty in a shifting market make you think it’s a bad time to buy. 

If you’re feeling unsure, just remember: Americans have consistently said real estate is the best long-term investment you can make. And if you want more information about why so many people think homeownership is worth it, reach out to a local real estate agent.

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Affordability

Newly Built Homes May Be Less Expensive Than You Think

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Do you think a brand-new home means a bigger price tag? Think again.

Right now, something unique is happening in the housing market. According to the Census and the National Association of Realtors (NAR), the median price of newly built homes is actually lower than the median price for existing homes (ones that have already been lived in):

a graph of sales and pricesYou read that right. That brand new, never-been-lived-in house may cost less than the one built 20 years ago in a neighborhood just down the street. So, if you wrote off a new build because you assumed they’d be financially out of reach, here’s what you should know. You could be missing out on some of the best options in today’s housing market.

Why Are Newly Built Homes Less Expensive Right Now?

1. Builders Are Building Smaller Homes

Builders know that buyers are struggling with affordability today. So, instead of building big houses that may not sell, they’re building smaller ones that will. According to the Census, the average size of a newly built single-family home has dropped considerably over the past few years (see graph below):

a graph of a growing graphAnd as size goes down, the price often does too. Smaller homes use fewer materials, which makes them less expensive to build. That helps builders keep prices lower so more people can afford them.

2. Builders Are Offering Price Cuts and Incentives

In May, according to the National Association of Home Builders (NAHB), 34% of builders lowered their prices, with an average price drop of 5%. That’s because they want to be sure they’re selling the inventory they have before they build more.

On top of that, 61% of builders also offered sales incentives – like helping with closing costs or buying down your mortgage rate. These are all ways builders are making their homes more affordable, so these homes sell in today’s market.

Your Next Step? Ask Your Agent What’s Available Near You

If you’re trying to buy a home right now, be sure to talk to your agent to find out what builders are doing in and around your area. They can find new home communities, as well as builders who are offering incentives or discounts, and hidden gems you might not uncover on your own.

Plus, buying a newly built home often means there are different steps in the process than if you purchase a home that’s been lived in before. That’s why it’s so important to have your own agent who can explain the fine print. You want a pro in your corner to advocate for you, negotiate on your behalf, and make sure your best interests come first.

Bottom Line

You could get a home that’s brand new, with modern features, at a price that’s even lower than some older homes. Talk with a local real estate agent about what you’re looking for and see if a newly built home is the right fit for you.

If buying a home is on your to-do list, what would stop you from exploring newly built options?

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The information contained, and the opinions expressed, in these article are not intended to be construed as investment advice. Let's Talk Real Estate, Mark Sincavage, Landshark Mark, LLC and Keeping Current Matters, Inc. do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Let's Talk Real Estate, Mark Sincavage and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.