Buyers, many of whom have been frustrated by the lack of homes on the market and even outbid on the abodes of their dreams, snapped up more newly built homes last month as prices fell.
According to the U.S. Department of Commerce’s monthly new residential construction report, March sales of never before lived in, single family houses were up nearly 6.7% over February and about 4.3% over the previous year. There were 48,000 new homes sold in March, which were not seasonally adjusted. The median price of the new homes was $288,000, a nearly 3.2% drop from February and a 1.8% decline compared to a year earlier. It’s an indication that new homes are being offered at lower price points to attract first-time buyers.
That’s significant because buyers typically pay a premium for newly constructed homes, which tend to be larger and attract those with deeper pockets. New residences have become increasingly expensive to erect since the financial crisis as the costs of labor and materials rise at a time when it’s harder for builders to secure financing and permits. It’s difficult for builders to produce lower-price homes, and that’s why we aren’t seeing bigger gains in sales.
The bulk of sales, 37%, were in the still somewhat affordable $200,000 to $299,999 price range, according to the report. About 13% of the purchases were between $150,000 and $199,999, while 17% were in the $300,000 range.
Nationally, the overwhelming majority of sales, about 31,000, were in the lower-priced South.
