More Affordable New Homes Hit the Market in July—Well, a Few More

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Whether you’re a buyer hoping to purchase your first home or a homeowner hoping to trade up to a bigger and better abode without breaking the bank, there hasn’t been much good news coming out of the cutthroat housing market these days.

But there is a spot of good news for those without deep pockets. More newly built homes in the under-$200,000 price category were sold in July, according to a joint report by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. Unfortunately, there weren’t that many more—and prices ticked up.

Overall, about 571,000 new homes were sold in July—down 9.4% from June and dropping 8.9% from July 2016. The median price of a new home rose to $313,700, up 0.67% from June and 6.3% from the same month a year earlier.

(realtor.com® only looked at the seasonally adjusted numbers in the report. The numbers have been smoothed out over a year to compensate for seasonal fluctuations in the market.)

Builders sold about 8,000 new homes under $200,000 in July. (That’s about 16% of the total of all new homes sold for which the Census had price data.) It’s a little better than the 7,000 homes in that price range that changed hands in June, but it’s down from the 10,000 that were purchased in July 2016.

Still, the bulk of the new homes sold, about 26,000 or 54%, were between $200,000 and $399,999. So buyers on tight budgets will likely have to look elsewhere.

“It’s still pretty competitive,” says realtor.com Chief Economist Danielle Hale. “There’s still not a ton of new construction in the lower price ranges.”

New homes often cost more because builders must contend with high labor, material, and land costs as well as zoning and government regulations that can delay construction. It also can be tough to secure financing for their projects. These costs are then passed down to the buyers.

New homes cost about 18.9% more than existing homes, which have previously been lived in. The median cost of an existing home was $263,800 in June, according to the most recent data from the National Association of Realtors®.

But that isn’t slowing down sales of new homes, which stayed on the market for a median 2.9 months in July. That’s the same as June but was down from 3.6 months in July of 2016.

“Homes are continuing to sell very quickly,” Hale says.

The post More Affordable New Homes Hit the Market in July—Well, a Few More appeared first on Real Estate News & Insights | realtor.com®.

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