When looking for a home, buyers often assume new construction will cost much more than a home that was previously lived-in. Although this may be true in many cases, it’s no longer true across the board. There are times when a newly built home can actually offer significant budget-friendly advantages over one that was pre-owned. Here’s how new construction homes could present some affordable opportunities for Michigan homebuyers.
Lower Median Prices for Newly Built Homes
According to recent data, from the U.S. Census , median sales price of new houses sold in June 2024 was $417,300. This is lower than the average sales price of $487,200.
How is this possible? The housing market is influenced by supply and demand. In many areas, there is a high demand for homes coupled with a limited supply of existing homes, which drives up prices. In response, builders are bringing smaller and affordable homes to the market.
“As the market continues to tighten on existing-home availability, a new home is becoming a viable option for more and more homebuyers,” says Bob Seeman, vice president of sales, new homes for Realtor.com®. “Many new-home builders are able to offer some distinct financial advantages over resale homes. Some of those are obvious, and some are not.”
How to Find an Affordable New Construction Home
Finding a good deal does require some research of the new-construction market. The key is knowing where to search for your home and finding the right opportunity with the builder incentives being offered.
Where to Search for New Construction Homes
Rural areas with limited housing inventory are can be a prime location for new construction deals. In some areas, the cost of land for new developments is lower than the cost of land in established neighborhoods. Developers can purchase large areas of land at reduced rates, which helps keep the overall cost of new homes down.
Take Advantage of Builder Incentives
Another significant advantage of opting for a newly built home is the array of incentives that builders offer to attract buyers. Some common incentives include:
Closing Cost Assistance: Many builders offer to pay a portion or even all of the buyer’s closing costs. This can save buyers thousands of dollars upfront, making the initial purchase more affordable.
Upgraded Features: Builders often include upgraded features and finishes as part of their incentive packages. This means buyers can get premium appliances, countertops, flooring, and other desirable upgrades at no additional cost. Not only can buyers enjoy these premium features, these upgrades can also boost the home’s value later.
About Michigan Mortgage Lender, Julie Krumholz from Superior National Bank
With over 35 years of experience in the mortgage industry, Julie Krumholz from Superior National Bank is a trusted resource and friend to homebuyers. Julie has worked in processing, closing, loan origination, underwriting, and QC auditing and has even co-owned a mortgage brokerage firm. Julie applies her knowledge to help first-time and seasoned homebuyers with a seamless homebuying experience.
