Limited housing stock and insatiable demand are causing homebuyers to pay more for existing homes than newly built ones. This marks the first year since 2005 the trend has occurred. The median price for a new home dropped to $330,800 in March, according to Business Insider, while the median price for an existing home reached $334,500. Home sales reached the fastest pace since 2006 with a seasonally adjusted annual rate of 1.02 million in March, up from February's 846,000 home sales. At March's rate, the current supply of 307,000 new homes would only last 3.6 months.
To be sure, monthly sales data is volatile and the pricing switch-up between new and previously owned homes could reverse in April. The construction of new homes — and where the bulk of those units are built — also stands to provide a lasting drag on selling prices.
New homes also only count for roughly 10% of purchases in the US housing market. While prices fell in March, the continued surge for existing home values stands to diminish affordability even further.
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