It's been rather challenging lately being a home buyer in this tight market. The lack of available homes has driven prices, and stress levels, to new highs. But it's about to get a bit better for those seeking to move into a newly constructed home of their very own.
Permits, the best indicator of how many newly built homes will come onto the market over the next few months, were up in August. Builders were issued 5.7% more permits in July than August and 8.3% more than August 2016. A good portion of those permits were issued to approve construction of condo units and apartment buildings. But, the number of permits for those perennially in-demand single-family homes were up 7.7% over August 2016. It’s not the type of growth that we saw in the prior decade, but it is solid growth that is sustainable.
Don’t be surprised if there is some bad news on the home building front over the next few months with the fallout from Hurricanes Harvey and Irma. There will be a significant increase in demand for more construction workers to rebuild / repair the devastating damage caused in Texas and Florida.
It's also important to note that new homes aren't for everyone. They cost significantly more, about 21% more on average, than existing homes. The median price of an existing home was $258,300 in July, compared with $313,700 for a newly built home, according to the most recent data from the U.S. Department of Housing and Urban Development.
That said, as new construction continues to increase, home buyers should have more choices and more time to make purchase decisions compared to today's quick-moving housing market. So, hang in there, and know that help is on the way. As always, the best advice is to consult with a qualified real estate agent and experienced mortgage finance professional. We have an experienced team of mortgage finance professionals who stand ready to assist you with this very important financial decision.