Thursday, March 4, 2021

New Construction Homes Are in Demand but Face Many Challenges

Photo by David McBee from Pexels
 The current housing market is strong and new construction homes are in demand. In fact, builder confidence is on the side of new construction as sales have blown expectations. The new construction interest is stemmed from a shortage of listings and record low mortgage rates.

Zillow New Construction Consumer Housing Trends Report 2020 shows that almost half of those who purchased a newly built home in the past two years only looked at new construction. For the 40% who would only look at new construction, the other 60% did consider purchasing an existing home.

Last year not only brought confusion with a global pandemic but also hindered materials, shipping and timelines in new construction. The report revealed that 80% of those who purchased new construction found some part of the purchase process challenging.

Demographics played a big part in the data shown of those who struggled with purchasing new construction. Close to 45% of new construction buyers were under the age of 40 and out of those 70% purchased their first home.

Fair price also was one of the top challenges. Last year 30% said that a fair price was a challenge while this year 37% express issues with fair pricing. Prices are hard to gauge because of the shortage of inventory. There are not enough sales to compare pricing.

Thirty-six percent of home buyers were concerned with the sale of their current home with the completion of their new home. Thirty-five percent admitted they are overwhelmed and doubt some of the processing of building and purchasing a new home.

Using a Realtor can help overcome these challenges. A Realtor can help with communication between the builder and buyer. Fifty-one percent of those purchasing a new construction home asked their Realtor to handle communications with the builder. A Realtor can educate buyers regarding financing and pricing and help buyers with timelines and delays. A Realtor can make purchasing a new construction home a breeze.

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