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More Starter Homes Are Hitting the Market

More entry-level homes – also known as starter homes – are popping up on the market. And after several years with very few homes available to buy and prices rising, there are finally some more options for first-time buyers.

Inventory Is Increasing – Especially at Lower Price Points

Over the past year, the total supply of homes for sale has improved. According to Realtor.com, in November there were 26.2% more homes for sale compared to this time last year, marking 13 months of inventory growth and the most homes available since December of 2019.

Interestingly, the growth isn’t spread evenly among all types of homes, though. According to Redfin, starter homes have seen the biggest increase (see graph below):

a graph of a number of homesSo, if you’re a first-time buyer who’s been sitting on the sidelines waiting because you thought you might never find a starter home in your market, this could be a game-changer. You finally have more options to choose from, and you just might be able to find one in your price range.

How an Experienced Agent Helps You Find a Starter Homes

Finding the right starter home at the right price point in your local market might feel like an unthinkable challenge, but a local real estate agent makes it easier. They stay up to date on the latest starter home listings in your area, so you don’t miss any opportunities.

Your agent will help you focus on homes that match your budget and your needs, making the search less stressful. They’ll also guide you through how to make the right offer and negotiate to get the best outcome possible.

On top of that, they handle the important details, like documentation and deadlines, so you can stay right on track. And if you have questions, your agent is there with answers and expert advice every step of the way.

Bottom Line

Starter homes are making a bit of a comeback, and this could be your chance to find one. Whether you’re ready to visit listings, need advice, or just want to see what’s out there, reach out to a local real estate expert.

The Top 2 Reasons To Look at Newly Built Homes

When planning a move, a newly built home might not be the first thing that comes to mind. But with more brand-new homes on the market and builders focusing on smaller, more affordable options, this type of home may just be the key to crossing the homebuying finish line.

Here’s why a new build is worth considering – and how an agent can help you find one that meets your needs and your budget.

1. More Newly Built Homes Are Available Right Now

First, let’s break down the types of homes on the market. A newly built home is a house that was just built or is under construction. On the other hand, an existing home is one a homeowner has already lived in.

Right now, the number of existing homes for sale is still low. And, if you’re struggling to find something you like because there aren’t that many existing homes for sale, opening up your search to include brand-new homes could really expand your options. That’s because there are more newly built homes available right now than in a typical year (see graph below):

a graph of blue lines and white textFrom 1983 to 2019, newly built homes made up only 13% of the total inventory of homes for sale. Today, that number has climbed to 28.8%, according to the most recent data.

And as Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes:

“Even though existing home sales have been stuck at low levels, newly constructed home sales look to mark one of its best annual performance in 15 years . . . The new home inventory has been consistently rising with homebuilders getting active and making up around 1/3 of total inventory.” 

While the uptick in new home construction is encouraging, rest assured that builders aren’t overdoing it, they’re just making up for over a decade of underbuilding. There are still way more buyers than there are homes on the market. But the good news for you is this increase in newly built homes means more options for your search.

2. Newly Built Homes Are Becoming Less Expensive

Still skeptical if a new build is right for you or if they’re even in your budget? The average cost of newly built homes has actually come down from a year ago.

Why is that? Builders know affordability is top of mind for homebuyers right now. So they’re focusing their efforts on building smaller homes they can offer at lower price points and are more likely to sell. As Realtor.com says:

“Builders are increasingly bringing smaller, more affordable homes to the market, so buyers may find more newly-built homes that fit their budget.” 

Something to keep in mind: buying a newly built home isn’t the same as buying an existing one. Builder contracts have different fine print. So be sure to partner with a local agent who knows the market, builder reputations, and what to look for in those contracts.

Bottom Line

Depending on your needs and budget, a new build might be the opportunity you’ve been waiting for to bring your homebuying vision to life. If you’re interested in a brand-new home, connect with an agent so you can check out what builders in your area are up to.

What Will It Take for Prices To Come Down?

You may be wondering if home prices are going to crash. And believe it or not, some people might even be hoping this happens so they can finally purchase a more affordable home. But experts agree that’s not what’s in the cards – and here’s why.

There are more people who want to buy a home than there are homes available to purchase. That’s what drives prices up.

Let’s break that down and explore why, nationally, home prices aren’t going to be coming down anytime soon.

Prices Depend on Supply and Demand

The housing market works like any other market – when demand is high and supply is low, prices rise.

According to the latest estimates, the U.S. is facing a housing shortfall of several million homes. That means there are far more people looking to buy (demand) than there are homes for sale (supply). That mismatch is the key reason why prices won’t fall at the national level. As David Childers, President of Keeping Current Matters (KCM), puts it:

“The main driving force on pricing is the limited amount of inventory in most markets across the country. That issue is not going to be solved overnight or in the next twelve months.”

How Did We Get Here?

For over 15 years, homebuilders haven’t been building enough homes to keep up with buyer demand. After the 2008 housing crisis, homebuilding slowed significantly, and it’s only recently started to recover (see graph below):

a graph of a number of yearsEven with new construction on the rise over the past few years, builders are playing catch-up. And according to AmericanProgress.org, they’re still not even keeping up with today’s demand, let alone making up for years of underbuilding.

And as long as there’s a housing shortage, home prices will remain steady or increase in most areas.

What About Next Year?

The majority of experts agree prices will keep rising next year, but at a much slower, healthier pace (see graph below):

a graph of green barsBut it’s important to note home prices vary by market. What happens nationally might not reflect exactly what’s happening in your area. If your local market has more inventory available, prices could grow more slowly or even decline slightly. But in areas where inventory remains tight, prices will keep climbing – and that’s what’s happening throughout most of the country. That’s why it’s crucial to work with a local real estate expert who understands your market and can explain what’s going on where you live.

Bottom Line

If you’re wondering what it’ll take for prices to come down, it all goes back to supply and demand. With inventory still limited in most markets, prices are likely to remain steady or rise.

To see what’s happening with home prices where you live, connect with a local real estate expert. They can help you understand your market and make a plan that works for you.

Why This Winter Is the Sweet Spot for Selling

a screenshot of a home sale

Some Highlights

  • Thinking about selling your house? Here are a few reasons why you may want to do it this season.
  • Buyers looking right now are serious about moving and the number of homes for sale is typically lower this time of year – helping your house stand out.
  • While inventory is higher this year than it’s been in the last few winters, you’ll still be in this year’s sweet spot.

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