People hunting for lower-priced homes probably have a migraine right now.
Based on the U.S. Commerce Department’s new residential sales report, Realtor.com reports that in September, only 2 percent of all new home sales were under $150,000, down from 5 percent in August and 5 percent in September 2015.
Builders only produce a limited number of starter homes. Danielle Hale, managing director of housing research at the National Association of Realtors, said to Realtor.com that the majority of first-time buyers target existing homes.
The report found that 12 percent of new homes were sold between $150,000 and $199,999, and 57 percent were priced between $200,000 and $399,999. The median price of a new home was $313,500 in September.
It’s more cost-effective for builders to put up more expensive abodes to cover the high costs of land, materials, and labor. Regulatory and financing hurdles may also push up the final price tag. “The new homes tend to be a little bit larger,” Hale says. “There tend to be different features in new homes, modern updates, and upgrades that you wouldn’t find in existing homes.”