Prices of New Homes Drop to Attract First-Time Buyers
First-time buyers are faced with a tough challenge of securing a home for themselves in this busy spring home buying season. While the inventory of existing homes for sale in the market is at its lowest, the good news is that new homes are made more affordable to attract first-time buyers.
As previously reported here on Realty Today, first-time buyers are having a hard time finding a new home to live in because of current market conditions. Aside from the low inventory of houses in the real estate market, first-time buyers also find themselves engaged in several bidding wars against other buyers and investors.
First-time buyers are often on the losing end of the pole when competing against investors because the latter has more available cash on hand for the down payment. The good news for first-time buyers, though, is that they can still secure a home for themselves without breaking the bank or engaging in bidding wars.
According to Realtor.com, the median price of new homes in March was $288,000, which was 3.2 percent lower than in February. This drop in the price of new homes has led to an increase in the sales of new homes across the U.S.
The publication notes that there were 48,000 new homes sold in March, which was a 6.7 percent increase in new-home sales from February and 4.3 percent higher than last year's sales.
"It's an indication that new homes are being offered at lower price points to attract first-time buyers," said the publication's chief economist, Jonathan Smoke.
The majority of new-home sales (37 percent) came from the $200,000-$299,999 price range. About 17 percent purchased new homes in the $300,000 range, 13 percent in the $150,000-$199,999 price range while only 6 percent bought a new home under $150,000.
The publication, however, noted that first-time buyers should still be wary about the house's location when buying. While a new home is enough to attract buyers, such is no longer the case years later when it's time for you to sell and you realize that your house is not in a desirable place.