New Home Preference Continues Rising
New homes’ appeal is just getting stronger. In a recent NAHB study, 61% of home buyers said their first choice is a newly constructed house when faced with the option of an existing house.
Since 2007, when 63% of purchasers chose new construction, that represents the largest proportion of buyers leaning toward a new house.
Comparatively, 54% of consumers in 2018 wanted a new house.
The COVID-19 epidemic cut current inventory and made many purchasers reluctant of visiting occupied homes, so the share dropped to 60% in 2020.
High mortgage rates had “locked-in” millions of existing homeowners in their homes by 2023; for many buyers, supply vacuum left new homes as their sole choice.
One significant statistic to draw attention to is that the price of a normal new house in 2023 was just 9% higher than that of an existing house ($428,200 against $394,101).
By contrast, that difference was four times greater in 2013 when new homes ($268,900) cost 36% more than existing homes ($197,400).
New homes can be built for sale (including the land) or custom-built on the buyer’s lot.
From 22% in 2003 to 40% in 2023, the NAHB study* reveals a growing trend in the share of buyers who would prefer a new house built-for-sale during the last two decades.
On the other hand, throughout this period the percentage of those who would rather a custom-built house dropped from 49% to 21%.
[Read more about this topic on Eyeonhousing.org]
