New Home Sales Rebound
Last month’s increase in home sales was also noticed in the new-home market. The National Association of Home Builders cited builders’ sales offers, such as mortgage rate buydowns, paying points for buyers, or even providing price discounts, for bringing back house buyers. According to NAHB polls, 57% of builders have reported using rewards to boost sales.
“Buyer discounts, combined with mortgage rate stability during the month of January, boosted the speed of new home sales for the month,” says Alicia Huey, NAHB chair. “However, revenues are down 19.4% year on year, indicating present market weakness.”
Affordability is still a concern for house purchasers. According to Danushka Nanayakkara-Skillington, the NAHB’s associate vice president for forecasting and research, the typical price of a new house has dropped for three straight months and is down from a year ago. The typical new-home price dropped for the third month in a row after peaking in October at $496,800. The typical price in January was $427,500, an 8.2% decrease from December.
In the new-home market, buyers are discovering more accessible inventory. Finished, ready-to-occupy inventory increased 115% year on year, despite an especially low level in 2022. Builders also point out that ready-to-occupy inventory accounts for only 17% of the overall stock of new houses.
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