Buyers who’re seeking a brand new home are benefiting from lower prices on newly constructed properties, according to a report by Realtor.com. While real estate prices have been increasing on the whole, that’s not quite so true when it comes to new constructions, which have seen prices fall to their lowest level in 12 months.
Realtor.com cites Commerce Department data as showing that the median price for a new home has fallen by 6.9 percent in the last month to $312,400 as of April 2018. That’s an increase of just 0.4 percent year-over-year, the Commerce Department said.
“This could be a sign that builders are trying to build at lower price points,” Danielle Hale, realtor.com’s chief economist, said.
That is of course great news for anyone shopping for a home who is on a tight budget, Hale suggested. “The largest share of home buyers and home shoppers in the market are looking to buy entry-level homes,” she added.
There are also some extremely affordable properties to be had, even though these are few and far between. Commerce Department data shows that five percent of all new home sales were priced at $150,000 or less in April, which is the largest share properties in this price bracket have had since August 2016.
However, new homes are still more expensive than existing properties, even if their price tags are falling. The average newly-built home remains 24.8 percent more expensive than the median existing home, which costs $250,400 according to data from the National Association of Realtors.
In addition, buyers are still hard-pressed to actually find a new property in their city, said one market analyst.
“The absolute level of [new-home] sales remains quite low compared to current demand levels and the overall population. But you can’t sell what hasn’t been built,” said Freddie Mac’s Len Kiefer in a statement. “As long as single-family home construction remains at a low level, so too will new home sales.”