Big builders are starting to introduce new homes at lower price points in an effort to appeal to Millennials, who are finally starting to buy homes.
CNBC reports that the median price of a new house in March was $315,000, which is around $80,000 more than the median price of an existing home. The reason is because after the recession, builders focused more on constructing bigger homes for high-end buyers. Many new starter homes were also snatched up by investors and turned into rental properties.
D.R. Horton and LGI Homes have entry-level houses. Over the last few years, NVR, Tri Pointe, Meritage, The New Home Co., and MDC have introduced low-price options as well.
Builders may want to capture starter-home demand, but they know that will come at a cost to their bottom lines. … The only way for builders to lower prices and take that hit to margins is to see big growth in new orders for new homes.
Advertisement
Related Stories
Market Data + Trends
Data Show New-Home Construction Starts Slowed at the End of 2023
Despite falling mortgage rates and a continuing shortage of housing inventory, the annual pace of new-home construction slowed in December
Housing Markets
Top 10 Metros for New Homes in 2024
Punta Gorda, Fla., and Myrtle Beach, S.C., top the list of places where new-home construction is booming
New-Construction Projects
US Housing Starts See Unexpected Surge in November
Census Bureau data show new-home construction was up 14.8% in November, suggesting the housing crunch may be easing