Latest Hits: Buyers May Be Drawn to Discounts in New-Home Market

In the current real estate market, builders are offering more incentives to attract buyers to new homes due to affordability concerns. With tight resale housing stock and high mortgage rates, new construction is becoming a more viable option for many buyers. Builders are using strategies like mortgage rate buydowns to make new homes more affordable, with 61% of builders willing to reduce rates to around 5%. Additionally, builders are constructing smaller, lower-cost homes, such as townhomes, to align new-home prices closer to existing-home prices. The rental market is also seeing growth, with a significant increase in single-family rentals. Despite challenges like labor shortages and rising material costs, builders are exploring alternative construction methods to lower costs. Real estate professionals are eyeing new-home niches, especially in metro areas with high construction activity like Houston, Dallas, and Phoenix. This trend could provide a bright spot in the housing market as current homeowners wait out high mortgage rates.