According to the latest New Residential Sales Report from the Census Bureau, new construction sales in August were up 3.5% from July and 12.7% from last year! This marks the second consecutive month with double-digit year-over-year growth (12.8% in July).
The report also showed that builders have ramped up construction with an increase in new construction starts and completions. The summer months are often a busy time for builders as they capitalize on the warmer weather to be able to finish projects.
Below is a table showing the change in starts, completions, and sales from last August.
Other notable news from the report is that the percentage of new construction sales in the $200-$299k range has continued to break away from the $300-$399k range.
This shows that builders are starting to build lower-priced homes that will help alleviate some of the inventory challenges in the starter and trade-up home categories. The chart below shows the full breakdown.
What does this mean for buyers and sellers?
If you are thinking of buying or selling in today’s market, you no doubt have heard that there is a shortage of existing homes for sale which has been driving home prices up across the country. The additional new construction coming to the market could help alleviate this shortage, but we are still not back up to pre-crisis levels.
You may not be ready to buy your first home, but that doesn’t mean you can’t prepare now. Here are three actions you can do while renting that will put you in a better position when you’re ready to buy.
Take a homeowner’s budget for a test drive. While you can’t predict all homeownership costs to the last penny, you can come up with a rough estimate of how owning a home will affect your budget. A REALTOR® can help you figure out how much you can afford, the potential mortgage payment you’d make, your local property taxes, and repair costs you might want to consider as a homeowner.
Check your credit report. Before you apply for a loan, request a free credit report to find out what a lender would see. If your report has errors, you can correct them before they affect your ability to qualify for a mortgage loan. And you might be able to take steps to improve your credit before purchasing a property. Your REALTOR® may be able to help you find resources to repair your credit.
Create a realistic wish list. There’s probably not a home that will offer every single amenity you desire, but you should have a general idea of what you’re looking for. So while a home with fewer than two bathrooms may be non-negotiable, perhaps you’d see the potential in one with a smaller kitchen or a not-so-appealing exterior paint job.
It’s never too early to talk to a REALTOR® when you know you’re going to buy a home. A REALTOR® can answer your questions about the homebuying process and help you avoid surprises along the way.
Article: Texas Association of Realtors