Real estate experts unanimously agree that the shortage of housing inventory won't end in 2024. New construction homes are stepping in to address this deficit, comprising a significant portion of the housing market. According to the National Association of Home Builders (NAHB), new construction now makes up about one-third of single-family inventory.

It’s important to note that purchasing a home from a builder is much different from buying a home from a seller. It’s crucial to collaborate with your trusted real estate advisor who is familiar with the versatility in builders and with the local market.

A Surge in New Build Inventory

Brand new homes are playing a substantial role in today’s housing inventory and therefore, have an impact on the market overall. So much so, that the latest report from the NAHB states that: “Due to low existing inventory, new construction has increased to approximately one-third of total single-family inventory in recent months when historically it was only 10% to 15%,” Robert Dietz, the chief economist of the National Association of Home Builders (NAHB) says according to USA Today.

They aren’t the only ones to echo this sentiment. According to MarketWatch, in September, "U.S. new-home sales just 'defied gravity,' surging to the highest level since February 2022."

This surge means that the proportion of newly built homes in the total homes available for purchase is more than twice the usual rate. Moreover, there's a promise of even more new homes in the pipeline.

Recent Census data indicates an increase in both new construction housing “starts” (initiating construction on more new homes) and new construction housing “completions” (homes where construction has just concluded). Contrary to concerns about overbuilding, Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), emphasizes the positive aspect: "Even more home building will be needed with the housing shortage persisting in most markets... Another 30% rise in home construction can easily be absorbed in the marketplace..."

Why This is Important

“The average cost to build a house in Georgia is between $330,685 and $727,509, and can range more widely from $200,000 on the low end to $1,000,000 on the high end. The average cost for a 2,000-square-foot house in Georgia is $395,000” According to Homelight.com

We’ve also seen an uptick in lenders offering incentives like mortgage rate buydowns for the entirety of the loan, covering closing costs, etc. Patrick Duffy, Senior Real Estate Economist at U.S. News, elaborates: “Builders have been using mortgage rate buy downs for many years as a sales incentive whenever interest rates are relatively high… Today, more builders are offering rate buydowns for the entirety of the loan, allowing buyers to finance more home for the same payment amount.”

With low inventory and high home prices in the city, prospective buyers are taking on the burbs! The WFH office model makes this possible and more accommodating as Young Millennials and GenZ strive to find creative ways to afford life in general according to the MReport. Not to mention, everything is NEW.

In Conclusion

It’s important to note that purchasing a home from a builder is much different from buying a home from a seller. It’s crucial to collaborate with your trusted real estate advisor who is familiar with the versatility in builders and with the local market. Reach out to us TODAY - we will serve as an expert in coordinating with the builder, reviewing contracts and navigating the process as a whole.

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