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Act soon to potentially get a great deal.
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There are many benefits to buying new construction. For one thing, you get to move into a house that’s in perfect condition (or at least it should be). You might also, depending on the situation, get an opportunity to customize certain features of your home — for example, choose your kitchen countertops, your bathroom cabinets, or the colors of the walls.
Also, when you buy new construction, you often get to avoid costly near-term repairs. That’s because many appliances, like water heaters, come with warranties, so you’re not likely to have to shell out money for repairs for at least a few years.
But there’s a downside to buying new construction — the cost involved. When you buy new construction, you’ll generally pay more for your home than you will for a property that’s been lived in. And you often have to make a larger down payment on a new construction home. Granted, that could help keep your mortgage payments manageable, but it’s a challenge nonetheless.
Another issue with buying new construction? Delays in the building process. That could cost you in different ways, not to mention add some upheaval to your life.
But right now, you might be able to get away with spending less on a newly built property. So if you’ve been interested in new construction, you may want to act quickly.
Builders are lowering prices
It costs a lot of money to construct a home, especially these days, what with inflation impacting the construction industry. But in February, 31% of builders reduced home prices, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index. That’s down from 35% in December and 36% in November.
If that trend continues, the percentage of builders offering price reductions might shrink even more as the year goes on. So if you want to buy new construction, you may want to act soon. Wait too long, and you might miss out on the chance to get a discount.
Will new construction pick up this year?
Builder confidence in the market for newly built single-family homes is up, according to the NAHB/Wells Fargo Housing Market Index. And now that supply chain backlogs are becoming less of an issue, builders might have an easier time ramping up on new construction.
An uptick in new construction could help solve the inventory shortage the real estate market is plagued with at present — but not immediately. It takes time to build a home. On top of the construction itself, permits need to be issued and inspections need to be carried out.
All told, new construction certainly has its perks. If you can afford the higher price tag that comes with a newly built home, you might appreciate owning a place no one has lived in before. But be sure to budget extra money for a newly built property purchase. And also, budget extra for upgrades you may want to make. Even though builders are lowering prices, that doesn’t mean you won’t end up spending more than anticipated.
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