Thinking About New Construction?
JUNE 26, 2017
The median price for a new single-family home reached a record high in May 2017 of $345,800, the Commerce Department reports. If you're thinking of buying new construction, you'll likely be paying a huge premium, as new-home prices are now 16.8 percent higher than they were just a year ago.
So far, however, the higher price tags don’t seem to be spooking home shoppers. In May, there were 61,000 new construction homes were purchased—a 2.9 percent increase from April and an 8.9 percent increase from a year ago. Today's builders are focused on the mid to upper end of the housing market which it will be more difficult to find more affordable homes for first-time buyers, millennials, and low-income buyers.
Only 6,000 newly constructed homes that sold in May were priced between $150,000 and $199,999. Further, there were about 14,000 sales in the $200,000 to $299,999 range. New homes now cost almost 37 percent more than pre-owned homes, which also reached record high prices in May.
Regionally, new-home sales increased the most in the West last month, posting a 13.3 percent month-over-month jump, followed by a 6.2 percent increase in the South. New-home sales, meanwhile, fell 10.8 percent in the Northeast and plunged 25.7 percent month-over-month in the Midwest.
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