Welcome to today’s real estate news roundup! In recent reports, we see positive developments in the housing market. Sales of newly built single-family homes reached their highest level since last fall, with a nearly 9% jump in March. Limited inventory options in the resale market are leading more buyers to consider new construction, and home builders are offering incentives like price reductions and closing cost credits to improve affordability. However, there are also challenges on the horizon, such as the impact of new nationwide codes on housing affordability. To stay informed about the latest trends and predictions in the housing market, read on for the full articles below.
New-Home Sales Climb as Builder Incentives Pay Off
Sales of newly built single-family homes reached their highest level since last fall, with a nearly 9% jump in March, according to the Commerce Department. Limited inventory options in the resale market are leading more buyers to consider new construction. Home builders are offering incentives like price reductions, closing cost credits, and mortgage rate buy-downs to improve affordability. The median sales price of a new home is now closer to that of existing-home sales. As mortgage rates are expected to decrease later this year, housing analysts anticipate stronger new-home sales in the coming quarters.
New Nationwide Codes Mandate a Major Blow to Housing Affordability | NAHB
Carl Harris, chairman of the National Association of Home Builders (NAHB), expressed concern over the recent announcement by the Biden administration regarding the U.S. Department of Housing and Urban Development (HUD) and U.S. Department of Agriculture (USDA) mandating that mortgages for new homes will only be insured if they are built to the 2021 International Energy Conservation Code (IECC).
Harris argues that this rule was implemented without adequate review and consideration of its impact on home buyers and renters. While the intention may be to reduce energy consumption, studies have shown that building to the 2021 IECC can increase the price of a new home by up to $31,000. It could take up to 90 years for a home buyer to realize a payback on the added cost.
This rule contradicts the Biden administration’s goal of constructing an additional 2 million homes. Instead of helping vulnerable home buyers and renters, it risks pricing them out of the housing market. The nationwide codes mandate is expected to significantly raise housing costs, particularly in the entry-level market for starter homes and affordable rental properties, while providing little benefit to new home buyers and renters.
Housing Market Predictions For 2024: When Will Home Prices Be Affordable Again? – Forbes Advisor
As we head into peak home-buying season, signs of life have begun to spring up in the housing market. However, high mortgage rates and home prices, along with low housing stock, continue to make homeownership out of reach for many. Experts predict that the housing market will continue to face affordability constraints in 2024, with hotter-than-expected inflation data and strong payroll numbers putting upward pressure on mortgage rates. While there are forecasts for an increase in home sales transactions compared to last year, price fluctuations will vary regionally and depend on local market supply. Despite ongoing challenges, some experts remain optimistic about a housing market recovery this year. To learn more about the predictions and trends in the housing market for 2024, read the full article.
New home sales surged in March despite elevated mortgage rates | CNN Business
Sales of newly built single-family homes in the United States soared in March, surpassing economists’ projections. Despite elevated mortgage rates, new home sales jumped 8.8% to a seasonally adjusted annual rate of 693,000, the strongest monthly increase since December 2022. The Northeast region saw the largest increase in sales, rising by 27.8% from February. In contrast, sales of existing homes fell 4.3% in March, indicating the challenges in the broader housing market. Limited housing supply and high prices continue to impact affordability. However, major homebuilders are utilizing incentives to support a healthy pace of new home sales. To learn more about the latest trends in new home sales and the challenges in the housing market, read the full article.