Why Aren’t More New Homes Selling?

July 27, 2016

There was no change in the amount of newly constructed homes that went under contract between May and June as the number held fast at 54,000. However, when comparing June’s numbers with the numbers from June 2015, sales of newly constructed properties were up 22.7 percent, according to a new residential construction report from the U.S. Census Bureau and the U.S. Department of Housing.

As realtor.com reports, a major reason the numbers between May and June remained unchanged is because builders are not taking any risks. Many of the new homes that are being built already have buyers, as opposed to building them on spec. Another issue, is that builders are either unable or unwilling to offer homes at more affordable price points.

The median price of a new home in June was $306,700, a 6.2 percent increase from May, and 23.8 percent above the median price of an existing home, which was at an all time high of $247,7000 in June.

June saw just 3,000 new homes that cost less than $150,000 sold and only another 12,000 that sold for between $150,000 and $199,999. That majority of the sales were for homes in the $200,000 to $499,999 range.

On a regional basis, only the West saw an increase in the number of homes sold month-over-month, increasing 7.7 percent from the previous month. The West also saw a 27.3 percent year-over-year. Year-over-year sales increased 50 percent in the Northeast, 33.3 percent in the Midwest, and 20.8 percent in the South.

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