If you’re thinking of buying a home, there really is no time
like the present. With today’s low mortgage rates, you have a great opportunity
to get more home for your money. The challenge is inventory. Like you, many
buyers want to capitalize on these market conditions, and it’s leading to more
buyer competition and bidding wars.
If you’re having a hard time finding a home to buy, it may
be time to talk to your trusted real estate advisor about a newly built home.
Early indicators show new-home construction is beginning to ramp up. While new
homes alone won’t be able to fix all of the inventory challenges, this does
mean you’ll soon have more options as you search for a home. As a buyer, a
newly built home may be exactly what you’re looking for – it’s brand new, and
with builder customization options, it’s uniquely yours from the ground up.
Here’s what industry experts are saying about new homes
coming to market:
Nadia Evangelou, Senior Economist and Director of
Forecasting at the National Association of Realtors (NAR), says recent research
could indicate upward momentum when it comes to new home construction.
Evangelou refers to the volume of new homes where construction began during a
set period, known in the industry as housing starts.
According to that research, housing starts reached their
highest level since 2006 in March of this year – an encouraging sign for the
industry. While they dipped slightly in April, Evangelou reiterates that the
level of housing construction is heading in a positive direction compared to
recent years:
“…we are currently building 24% more homes than we
typically have built in April in the last couple of decades. Thus, housing
construction is trending upward with housing starts likely to reach 1.6 million
for all of 2021 and rise further to 1.7 million in 2022.”
As new data pours in, it further confirms this trend.
According to the latest Monthly New Residential Construction report from the
U.S. Census Bureau, housing starts increased even more in May, which continues
the ongoing upward trend (see graph below) and indicates that ground is being
broken on even more new homes.
Robert Dietz, Chief Economist and Senior Vice President of
Economics and Housing Policy for the National Association of Home Builders
(NAHB), singles out another encouraging sign:
“It is also worth noting that the number of single-family
homes permitted but not started construction continued to increase in May,
rising to 142,000 units.”
This insight that there’s also an uptick in single-family
homes permitted serves as an additional sign that more new homes lie ahead.
It’s important to realize that the construction doesn’t have to start on these
homes before you may be able to purchase one. According to the Monthly New
Residential Sales report from the U.S. Census Bureau, many new homes are
selling before construction even begins (see graph below):
These signs are all good news for housing inventory. And as
the recent challenges of rising lumber prices and dwindling lumber supply begin
to improve, builders will be able to increase their production even more in the
months ahead.
Bottom Line
While the inventory challenges we’re facing today won’t be
solved overnight, the increase in new-home construction means your house may
have more competition in the market. Let’s connect to talk about finding your
dream home and the newly built homes available in our area.
Source: Real Estate with Keeping Current Matters
