Given the U.S. housing market has been sorely short of inventory since the end of 2020, you’d think buyers would be clamoring to buy homes. But in fact, the demand for new construction seems to be waning.
New home sales fell 10.9% in September from August. And new construction sales were also down 17.6% from September 2021, according to the Department of Housing and Urban Development and the Census Bureau.
If you are considering buying a newly built home, now may be the time to move forward. Clearly the demand for these homes is down, and that could give you more bargaining power with builders.
But new construction also has its drawbacks. It is therefore very important to know what you are getting into with a newly built home.
The advantage of buying a new construction
The main advantage of buying a newly built house is to be the first occupant of this property. This means that you are guaranteed to have a house in perfect condition and you will get appliances under warranty that should not break you within six months.
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Additionally, some new homes allow you to customize certain features before you close. Want peach-colored walls in one bedroom and green walls in another? Your builder may be able to make it happen so you don’t have to hire a painter after you move in – and deal with that hassle.
The downside of buying new construction
While there’s something to be said for living in a home that’s never been occupied before, you should also be aware that sometimes newly built properties don’t have the most up-to-date appliances and finishes. high quality. This is because it is common for builders to use basic materials to reduce costs.
But over time, you may find that your floors are more prone to chipping and your appliances are likely to slow down because they weren’t the best quality to begin with. And so, even if you manage to avoid short-term repairs when buying a newly built home, over time your repair costs could add up to shoddy materials.
Also, you will generally pay more for a newly built home than for a home you’ve already lived in. At a time when mortgage rates are rising, this could mean a very expensive purchase.
Additionally, supply chain issues still impact the construction industry. If you’re buying a new construction home that you have the ability to customize, you could experience significant delays if your cabinets or countertops run out of stock. This could be problematic if you are nearing the end of a lease and need to move out by a certain date.
Should you buy a new house?
If you can vary the cost of new construction, now might be the time to go for it. But first, crunch the numbers to figure out what mortgage you can afford. The last thing you want to do is take on an overpriced home, even if you find a builder who is willing to lower the price.
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