If you’ve been hoping to purchase a newly built home, there may be no better time than right now! Interest rates are still low, appreciation will continue to be strong, and we’re starting to see new construction rev up.
New construction can also give you the ability to customize a home to fit your needs and to make it uniquely yours. Today we’re diving into the trends that we’re currently seeing in the market involving new construction and how you can best get in on this opportunity!
What We’re Seeing
We’re seeing a few indicators that point to an upward trajectory in the number of new construction homes available on the market. First, housing starts have reached their highest level since 2006 in March of this year. You might be wondering what we mean by housing starts. Housing starts refer to the volume of new homes where construction began during a set period of time. Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), Nadia Evangelous, reports that we are currently building 24% more homes than we typically have built during the last couple of decades. Evangelou predicts that housing starts are likely to reach 1.6 million for all of 2021 and rise to 1.7 million in 2022.
Additionally, we’ve also seen an uptick in single-family homes permitted. MarketWatch reports that permits for single-family homes increased nearly 5%. Additionally, permits for duplexes, triplexes, and quadplexes surged 25.5%, suggesting that cities are looking to support the demand for housing, particularly in those higher-density neighborhoods.
How to Capitalize on This Opportunity
While all indicators point to an increase in newly built homes becoming available in the future, it’s important to note that you don’t have to wait until the homes are built to purchase. In fact, construction doesn’t even have to start. According to the Monthly New Residential Sales Report from the U.S. Census Bureau, many buyers are jumping on the opportunity to purchase a new construction prior to breaking ground on the home. We’ve included a graph below from Keeping Current Matters (KCM) that depicts the increase in buyers purchasing a pre-construction home.
Bottom Line
While the increase in new construction won’t resolve the low inventory issues that we see in this market, it is a new opportunity to be aware of. If you’ve considered a new construction home but didn’t think the availability was there, now may be the time to reconsider. Of course, there are some things to keep in mind when it comes to a new construction build, so be sure to talk to your agent if it’s something you are interested in. We’re happy to answer any questions that you might have. Give us a call!