Three Stifling Factors
It may seem counterintuitive, but for prospective buyers looking to purchase a home in today’s tough market, the best option might be to buy a brand new home, instead of a used one.
Generally, homeowners who locked in a low mortgage rate over the past several years are less likely to sell right now, leading to steeper competition for existing homes.
Meanwhile, the number of new homes hitting the market is increasing, which could be the saving grace for potential buyers.
In May, the number of new homes under construction hit 1.56 million units, a dramatic 16% increase from April. These new homes made up roughly 33% of all active listings, nearly double the percentage from May 2019.
According to industry data, sales of new homes have been on the rise for seven straight months, leading to increased confidence among builders. In a nutshell, builders are selling houses faster, looking to lay more foundations, and feeling more optimistic about the market in general. All of this could be good news for those open to buying a new home.
Getting a Deal
In today’s market, homebuilders are motivated to sell newly built homes at a good price. To do that, roughly 56% of builders are offering perks such as cheaper loans or rate buydowns. Both of these discounting options are intended to offset the higher cost of a mortgage.
Given a rather rare set of circumstances, you might be able to get a better deal in today’s home market by shopping new, instead of used.
Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.