Home Shopping FAQs: Why Are New Construction Homes Cheaper?

Table of Contents

• Why Are New Construction Homes Cheaper?
• New Construction Homes are More Desirable, and Less Expensive
• Understanding Pricing Trends
• Shop New Construction Homes in Rivington

As you shop for a new home in DeBary, FL, you have three main options: to build your own house, to buy an older home listed for sale on the market, or to buy a new construction home. For many potential buyers, this third option offers the best of everything. It’s a new home, so it doesn’t need a lot of renovations and updates. No one has ever lived there. Yet, unlike building a home yourself, you don’t need to wait months and months for it to be ready. It’s move-in ready right now!

If you’re thinking that a new construction house done by the area’s top investors sounds fantastic, you’re right. This leads to another question, though. Why are new construction homes cheaper? Surely the “better” option would be more expensive, but this is not the case. Let’s look into this phenomenon right now.

Why Are New Construction Homes Cheaper?

It’s no secret that U.S. home prices have been steadily increasing over the past year or two. You may assume that this trend extends to existing properties on the market to new construction homes. Several real estate industry professionals and industry websites point out an odd trend emerging in March 2022’s housing data. The median price of a new construction home was actually lower than that of an existing home that sold that month.

New Construction Homes are More Desirable, and Less Expensive

There’s something to be said for the desirability of moving into a house that no one has lived in before. Everything is clean and pristine. Every detail, from the biggest appliances to the molding along the baseboards, is in a perfect state.

That is why it may come as a surprise that the median price of a new construction home that sold in March was $330,800, while the median price of an existing home that sold that month was $334,500. How could something brand new cost less than something that is essentially used? You’d never expect to pay more for a used car than a new car. The truth lies in the fact that you’re not really comparing similar items.

Understanding Pricing Trends

It’s not that new construction homes are cheaper, it’s that the other homes being listed for sale are so much more expensive. In fact, there’s a major shortage of lower-priced homes on the market. The existing homes that are being sold right now are, for the most part, higher-priced homes that are skewing the median upward. This causes the segment to come in higher than the median price of new construction.

The number of existing homes priced between $100,000 and $250,000 that sold in March dropped 10% from a year prior. This is not because there was less demand, but because the inventory wasn’t there. Just the opposite, the number of homes priced between $750,000 and $1 million that sold in March climbed 82% from a year prior. That’s nearly double! To take it one step further, sales of homes listed at $1 million or more were up 108% in March.

Shop New Construction Homes in Rivington

There are many benefits to purchasing a newly-built home. It’s a fantastic way to find a home that perfectly suits your taste or your needs. Rivington is the best neighborhood to find new construction homes in the Debary, Florida area. We encourage you to reach out to us to learn more about your options for both single-family homes and townhouses in our community. We’ll show you how beautiful, convenient, and safe it is to live in Rivington. We are more than just a neighborhood; we’re a community!

Why are new construction homes cheaper? Let’s answer that question with another question. What are you waiting for? The homes in Rivington, the best in DeBary, won’t be on the market for long. Begin the process of looking for and buying your new home today!