Buying a house is likely to be the biggest money choice anybody will ever need to make. If you compare the advantages of buying a newly built house to one that’s a few years older, you may find the price difference lower than you imagined. Honestly, with today’s economics, a newly built house is almost comparable to that of a five-year-old house. And, of course, a new construction home offers better architecture, newer facilities, and generally resides in the best school districts.
How did we get here, you wonder? Let’s go through the market dynamics, the Federal Reserve interest rate stunts, and why the time to purchase is now—whether you’re an investor or a first-time buyer.
The Interest Rate Rollercoaster
Last year, most homebuyers expected declining mortgage interest rates. The Federal Reserve had signaled several times during the year that rates would decline, which would make home ownership more affordable. That did not occur. Instead, in December, the Federal Reserve failed to lower interest rates as everyone had anticipated.
This left most of the builders in a dilemma. They were expecting strong demand and constructed huge stocks of newly built homes, expecting people to flock into the market since rates were lowered. But when rates failed to decrease, fewer individuals could purchase homes, and most of the new homes were not sold.
Builders with Too Much Inventory
Since the building firms had been gearing up for a year of strong demand, now they were left with more houses. All the builders in some of the neighborhoods had 100 to 200 homes on their list. Some of them were even complete and ready to move in.
In order to sell these houses at lightning speed, the builders went to the real estate agents and offered them unimaginable discounts so that they can lure the buyers. They already were haggling over prices and even giving extra discounts so that people can purchase their homes.
How Buyers Benefited in This Scenario
Realtors were quick to call their customers, declaring that this was the ideal moment to buy a house at an excellent price. Buyers began submitting offers, and to everyone’s surprise, nearly every offer was accepted at the same or a little higher amount. And there was more. Builders were desperate to sell, so they inserted special deals. Buyers were treated to:
- Major appliances – This included having a washer, dryer, refrigerator, and even blinds in the windows throughout the whole house.
- Sprinkler systems and garage door openers – Builders were generally including these as a free option where customers normally paid extra for them.
- Interest rate buy-downs – Builders would actually pay to reduce the interest rate on the buyer’s mortgage, which would save them thousands of dollars throughout the length of the loan.
The buy-down would take around $20,000 out of builders’ pockets, but they believed it was an investment they wanted to make so they could sell their inventory.
To homebuyers, this was equivalent to buying a house with everything and the option to upgrade and pay less on the mortgage.
Why Buy Now
Whether you are looking to buy a home or not, now is the time. If you are an investor who wants to expand your property portfolio or a first-time buyer searching for your ideal home, this market has plenty in store for you.
1. Investors Can Pounce on Cheap Prices
The real estate investors need to be quick because the prices will not fall so drastically in the remainder of the year. Since the developers are already providing such a discount sale, the investors can buy houses at low prices, rent them, and begin generating their income immediately.
2. Best Deals for First-Time Buyers
For first-time homebuyers, this is an excellent opportunity to purchase a home without the extra expenses that are usually attached to it. Builders are offering homes with appliances, blinds, and even monetary incentives, so purchasing a home is more affordable. Instead of waiting for prices to drop even further, consumers can make an excellent deal today.
3. Uncertainty Over Interest Rates
While we’re all waiting for falling interest rates on the horizon, no promises. When they fall, home prices will increase because demand will increase. By buying now, you can get a good price and benefit from builder incentives.
Also Read: This Lady Was Getting Rejected For Home Loan Again and Again Until…! | Sonal Shah Houston
Conclusion
If you’re in the market for a home, don’t wait. Right now, new construction homes are available at prices similar to slightly older homes, but with more features and benefits. Builders are offering fantastic deals, including price reductions, free appliances, and lower interest rates.
If you are in the Houston area or in the outlying counties, I can assist you in finding your dream home. There is so much on the market that you cannot afford to pass up this chance.