At Home with Team Gabriel

Buying a home this spring? You’re probably navigating today’s affordability challenges and dealing with the limited number of homes for sale. But, what if there was a solution that could help with both?

If you’re having a hard time finding a home you love, and mortgage rates are putting pressure on your budget, it may be time to look at newly built homes. Here’s why.

New Home Construction Is an Inventory Bright Spot

When looking for a home, you can choose between existing homes (those that are already built and previously owned) and newly constructed ones. While the number of existing homes for sale has increased this year, there are still fewer available than there were in more typical years in the housing market, like back in 2018 or 2019.

So, if you’re looking to expand your pool of options even more, turning to newly built homes can help. As Danielle Hale, Chief Economist at Realtor.com, explains:

“The shortage of existing homes For Sale has opened up the possibility of new-home construction to more buyers who may not have once considered it.”

And the good news is, there are more newly built homes to pick from right now. The graphs below use data from the Census to show how new home construction is ramping up in two key areas (see most recent spike in green):

Starts, or homes where builders just broke ground, have seen a big increase lately. And completions, homes that builders just finished, are also up significantly. So, if you want a new, move-in ready home or you want to get in early and customize your build along the way, you have more options right now.

Builders Are Offering Incentives To Help with Affordability

And to sweeten the pot, builders are offering things like mortgage rate buy-downs and other perks for homebuyers right now. This can help offset today’s affordability challenges while also getting you into your dream home. Mark Fleming, Chief Economist at First American, explains why you may find builders have more wiggle room to offer more for you than the typical homeowner:

“Builders aren't rate locked-in. They would love to sell you the home because they're not living in it. It costs money not to sell the home. And many of the public home builders have said in their earnings calls that they are not going to be pulling back on incentives, especially the mortgage rate buydown, so that will help the new-home market continue to perform well in the spring home-buying season.”

An article from HousingWire also says this about what builders are offering right now:

 ". . . the use of sales incentives still shows some momentum as 60% of respondents reported using them, up from 58% in February. "

Just remember, buying from a builder is different from buying from a home seller, so it’s important to partner with a local real estate agent. Builder contracts can be complex. A trusted agent will be your advocate throughout the process.

They’ll be your go-to resource for advice on construction quality and builder reputation, reviewing and negotiating contracts to get you the best deal, helping you decide on which customizations and upgrades are most worthwhile, and a whole lot more.

In Conclusion

If you’re struggling to find a home to buy, or with today’s affordability challenges, let’s connect to see if newly built homes could be the solution you’re looking for.

If you’re trying to sell your house, you may be looking at this spring season as the sweet spot – and you’re not wrong. We’re still in a seller’s market because there are so few homes for sale right now. And historically, this is the time of year when more buyers move, and competition ticks up. That makes this an exciting time to put up that for sale sign.

But while conditions are great for sellers like you, you’ll still want to be strategic when it comes time to set your asking price. That’s because pricing your house too high may actually cost you in the long run.

The Downside of Overpricing Your House

The asking price for your house sends a message to potential buyers. From the moment they see your listing, the price and the photos are what’s going to make the biggest first impression. And, if it’s priced too high, you may turn people away. As an article from U.S. News Real Estate says:

“Even in a hot market where there are more buyers than houses available for sale, buyers aren't going to pay attention to a home with an inflated asking price.”

That’s because no homebuyer wants to pay more than they have to, especially not today. Many are already feeling the pinch on their budget due to ongoing home price appreciation and today’s mortgage rates. And if they think your house is overpriced, they may write it off without even stepping foot in the front door, or simply won’t make an offer if they think it’s priced too high.

If that happens, it’s going to take longer to sell. And ideally you don’t want to have to think about doing a price drop to try to re-ignite interest in your house. Why? Some buyers will see the price cut as a red flag and wonder why the price was reduced, or they’ll think something is wrong with the house the longer it sits. As an article from Forbes explains:

“It’s not only the price of an overpriced home that turns buyers off. There’s also another negative component that kicks in. . . . if your listing just sits there and accumulates days on the market, it will not be a good look. . . . buyers won’t necessarily ask anyone what’s wrong with the home. They’ll just assume that something is indeed wrong, and will skip over the property and view more recent listings.”

Your Agent’s Role in Setting the Right Price

Instead, pricing it at or just below current market value from the start is a much better strategy. So how do you find that ideal asking price? You lean on the pros. Only an agent has the expertise needed to research and figure out the current market value for your home.

They’ll factor in the condition of your house, any upgrades you’ve made, and what other houses like yours are selling for in your area. And they’ll use all of that information to find that target number. The right price will bring in more buyers and make it more likely you’ll see multiple offers too. Plus, when homes are priced right, they still tend to sell quickly.

In Conclusion

Even though you want to bring in top dollar when you sell, setting the asking price too high may deter buyers and slow down the sales process.

Let’s connect to find the right price for your house, so we can maximize your profit and still draw in eager buyers willing to make competitive offers.

One of the biggest hurdles buyers have faced over the past few years has been a lack of homes available for sale. But that’s starting to change.

The graph below uses the latest data from Realtor.com to show there are more homes on the market in 2024 than there have been in any of the past several years (2021-2023):

Does That Mean Finding a Home Is Easier?

The answer is yes, and no. As an article from Realtor.com says:

“There were nearly 15% more homes for sale in February than a year earlier . . . That alone could jolt the housing market a bit if more “For Sale” signs continue to appear. However, the nation is still suffering from a housing shortage even with all of that new inventory.”

Context is important. On the one hand, inventory is up over the past few years. That means you’ll likely have more options to choose from as you search for your next home.

But, at the same time, the graph above also shows there are still significantly fewer homes for sale than there would usually be in a more normal, pre-pandemic market. And that deficit isn’t going to be reversed overnight.

What Does This Mean for You?

You might find a few more choices now than in recent years, but you shouldn’t expect a ton of options.

To help you explore the growing list of choices you have now, team up with a local real estate agent you trust. They can really help you understand the inventory situation where you want to buy. That’s because real estate is local. An experienced agent can share some smart tips they’ve used to help other buyers in your area deal with ongoing low housing supply.

In Conclusion

If you’re thinking about buying a home, let’s team up. That way, you’ll be up to date on everything that could affect your move, including how many homes are for sale right now.

Recent headlines may leave you wondering what’s next for mortgage rates. Maybe you’d previously heard there were going to be cuts this year that would bring rates down. That refers to the Federal Reserve (the Fed) and what they do to their Fed Funds Rate. While cutting, or lowering, the Fed Funds Rate doesn’t directly determine mortgage rates, it does tend to impact them. But when the Fed met last week, a cut didn’t happen — at least, not yet. 

There are a lot of factors the Fed considered in their recent decision and most of them are complex. But you don’t need to be bogged down by those finer details. What you really want is the answer to this question: does that mean mortgage rates aren’t going to fall? Here’s what you need to know. 

Mortgage Rates Are Still Expected To Drop This Year

While it hasn’t happened yet, that doesn’t mean it won’t. Even Jerome Powell, the Chairman of the Fed, says they still plan to make cuts this year, assuming inflation cools:

“We believe that our policy rate is likely at its peak for this tightening cycle and that, if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.”

When this happens, history shows mortgage rates will likely follow. That means hope isn’t lost. As a recent article from Business Insider explains:

“As inflation comes down and the Fed is able to start lowering rates, mortgage rates should go down, too. . .”

What This Means for You

But you don’t necessarily want to wait for it to happen. Mortgage rates are notoriously hard to forecast. There are so many factors at play and any one of those can change the projections as the economy shifts. And it’s why the experts offer this advice. As Mark Fleming, Chief Economist at First American, says:

“Well, mortgage rate projections are just that, projections, not promises and don't forget how hard it is to forecast them. . . So my advice is to never try to time the market . . . If one is financially prepared and buying a home aligns with your lifestyle goals, then it could be the right time to purchase. And there's always the refinance option if mortgage rates are lower in the future.”

Basically, if you’re looking to move and trying to time the market, don’t. If you’re ready, willing, and able to move, it may still be worth it to do it now, especially if you can find the home you’ve been searching for.

In Conclusion

If you’re looking to buy a home, let’s connect so you have someone keeping you up-to-date on mortgage rates and helping you make the best decision possible.