new construction

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It was bound to happen. Just as home builders began to feel more confident about attracting potential buyers, rising mortgage rates are proving too much for those customers.

After steadily rising for seven consecutive months, builder confidence retreated in August as rising mortgage rates nearing 7% (per Freddie Mac) and stubbornly high shelter inflation have further eroded housing affordability and put a damper on consumer demand.

Builder confidence in the market for newly built single-family homes in August fell six points to 50, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released August 15.

Home Builders Need Workers, Buildable Lots and Distribution Transformers

“Rising mortgage rates and high construction costs stemming from a dearth of construction workers, a lack of buildable lots and ongoing shortages of distribution transformers put a chill on builder sentiment in August,” said NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham, Ala.

Huey said that other factors are helping support the demand for new construction.

“But while this latest confidence reading is a reminder that housing affordability is an ongoing challenge, demand for new construction continues to be supported by a lack of resale inventory, as many homeowners elect to stay put because they are locked in at a low mortgage rate.”

Housing Affordability Compared to US Median Income

Rising home prices and interest rates coupled with elevated construction costs, low existing inventory and solid demand resulted in a significant decline in housing affordability during the second quarter of 2023.

According to the NAHB/Wells Fargo Housing Opportunity Index (HOI), 40.5% of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $96,300.  This is down from 45.6% posted in the first quarter of this year, and the second-lowest reading since NAHB began tracking affordability on a consistent basis in 2012.

Where to Buy? Affordable Housing Markets Around the Country

The Housing Opportunity Index shows that the national median home price increased to $388,000 in the second quarter, up from $365,000 in the previous quarter. Meanwhile, average mortgage rates rose from 6.46% to 6.59% during this period.

The top five most affordable major housing markets in the second quarter of 2023 were:

  • Lansing-East Lansing, Mich.
  • Scranton-Wilkes-Barre, Pa.
  • Harrisburg-Carlisle, Pa.
  • Indianapolis-Carmel-Anderson, Ind.
  • Pittsburgh, Pa.

Top five least affordable major housing markets—all located in California:

  • Los Angeles-Long Beach-Glendale
  • Anaheim-Santa Ana-Irvine
  • San Diego-Chula Vista-Carlsbad
  • Oxnard-Thousand Oaks-Ventura
  • San Francisco-San Mateo-Redwood City

Meanwhile, Cumberland, Md.-W.Va., was rated the nation’s most affordable small market, with 95.5% of homes sold in the second quarter being affordable to families earning the median income of $89,900.

The top five least affordable small housing markets were also in the Golden State. Tied at the very bottom of the affordability chart were Salinas, Calif., and San Luis Obispo-Paso Robles, Calif., where 6.5% of all new and existing homes sold in the second quarter were affordable to families earning the area median income of $100,400 in Salinas and $113,100 in San Luis-Obispo-Paso Robles.

NAHB Chief Economist Robert Deitz Calls for Government Action

Deitz said that government policies aimed at helping builders could help the housing shortfall. He said the shortfall is currently about 1.5 million housing units.

“Declining customer traffic is a reminder of the larger challenge that shelter inflation is up 7.7% from a year ago and accounted for a striking 90% of the July Consumer Price Index reading of 3.2%,” said NAHB Chief Economist Robert Dietz. “The best way to bring housing inflation down and ease the housing affordability crisis is to enact policies at all levels of government that will allow builders to construct more homes to address a nationwide shortfall of approximately 1.5 million housing units.”

Builders Again Pressed Into Using Sales Incentives

The August HMI survey also revealed that rising mortgage rates are causing more builders to use sales incentives to attract home buyers.

After dropping steadily for four months (from 31% in March to 22% in July), the share of builders cutting prices to bolster sales rose again to 25% in August.

The average decline for builders reducing prices remained at 6%. And the share of builders using incentives to bolster sales was 55% in August, higher than in July (52%) but still lower than in December 2022 (62%).

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Image: Envato Elements

Source: smallbiztrends.com

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Townhouses offer convenience and amenities that appeal to a range of homebuyers. They’re also growing in popularity, with new townhouse construction up more than 28% from 2020 to 2021. Construction costs also increased during the same time period.

Whether you’re building an investment property or your own new home, determining the project cost is essential before breaking ground. The cost to build townhouses depends on the size, location, number of units, onsite amenities, and the style of the building.

What Is a Townhouse?

A townhouse, also called a townhome, is a type of single-family home that has two or more floors and a shared wall with at least one other home. Compared to different home types, like duplexes and triplexes, each townhouse is individually owned and has its own entrance. Given the high-density design, townhouses tend to be more common in urban and suburban communities.

Townhouses often have their own yard or garage, but may share other communal amenities, such as a pool or tennis court, with neighboring townhouses. These shared facilities are typically governed by a homeowner’s association (HOA), which townhouse owners pay fees to for managing amenities and providing services like landscaping and snow removal.

If choosing between a condo or townhouse, another distinction is that townhomes usually have more autonomy in customizing the exterior of their home and outdoor living space, and more responsibility for that space as well.

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Recommended: What is a Townhouse?

What Determines the Cost of Building a Townhouse?

The cost to build townhomes depends on a variety of factors. The type of townhouse, size, number of units, location, and additions like garages and basements all contribute to the total construction cost.

Here’s what to consider when estimating how much to build a townhouse.

Type of Townhouse

There are different types of townhouse layouts and configurations, including traditional, stacked, and urban.

•   Traditional: Generally organized in a row with two floors of living space, a basement, and garage.

•   Stacked: Refers to townhouse units stacked in a multi-floor building, which typically have their own entrances.

•   Urban: Similar to traditional townhomes, but often have more modern and spacious floor plans and higher prices.

Another key decision when purchasing a new construction home or townhome is whether to go with a modular or stick-built design. The components of a modular townhome are manufactured off-site, saving time and labor.

Stick-built townhouses are constructed on-site using a wooden frame and finished with a brick or vinyl exterior. This type of construction allows for greater customization, but generally comes at a higher cost than modular townhomes.

Recommended: Pros and Cons of Building a Townhouse

Square Footage

The cost to build a townhouse is impacted by the size, which is measured in square feet.

Townhomes cost between $111 to $125 per square foot on average. Because townhouses share walls and occupy smaller lots, they’re often more affordable than detached single-family new construction, which breaks down to an average of $150 per square foot.

Using the square footage to estimate total townhome cost is a fairly straightforward calculation. For instance, builders can expect to pay between $222,000 and $250,000 to erect a 2,000-square-foot townhouse based on the average range. Bear in mind that does not include the cost of the building site.

With these estimates, you can compare mortgage rates and determine what financing you qualify for.

Number of Rooms

The interior layout, including the number and types of rooms, is a key determining cost factor.

Not all rooms are created equal though, with kitchens and bathrooms being the most expensive due to appliances, tiling, plumbing, and more complex electrical work. The living spaces and bedrooms are generally simpler and cheaper to build.

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Number of Units

By definition, townhouses are built in groups. Leveraging economies of scale to build multiple units or a complex could reduce the cost per unit. Keeping the design and floor plan consistent across units can also lower the price.

So, how much does it cost to build a townhouse complex? That depends on the extent of amenities included, as well as the number of units.

Location

Location, location, location. Where you choose to build a townhouse will impact the cost of construction and its value once completed.

The cost of labor varies significantly between regions. Paying builders and contractors typically accounts for 40% of new home construction expenditures. The location of the townhouse also matters in terms of costs related to accessing the site and sourcing materials.

Additions

Wondering how much to build townhomes with attractive amenities? Here’s what you can expect to pay for common townhome add-ons.

•   Basement: Building a basement foundation costs between $24,000 and $44,500 on average.

•   Driveway: The materials and installation costs for a new driveway range from $2 to $15 per square foot depending on the material used.

•   Fencing: More affordable fence materials like wood, vinyl, and composite range from $10 to $45 per linear foot.

•   Garage: Cost varies by size, with one-car garages ranging from $10,500 to $27,000 and double garages costing between $14,500 and $40,300.

•   Pool: Expect to pay between $28,000 and $66,500 for an in-ground pool, with vinyl and fiber-glass lining typically costing less than concrete.

•   Shed: Adding a storage shed ranges from $300 to $15,000, with pre-fabricated options usually costing less than custom builds.

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Construction Cost for Building a Townhouse

Construction costs are often the deciding factor when thinking of buying or building a house. Townhouses are generally less expensive to build per unit than a detached single-family home.

In addition to the factors discussed above, townhouse construction involves a range of pre-construction costs, like purchasing land, building permits, and architectural or design fees. The materials and labor usually account for the majority of the expenses to build a townhouse.

Townhouses can be designed as starter homes or luxury properties, and project budgets can be structured according to the target market and expected return on investment. Still wading into the waters of homebuying? Consult a Home Loan Help Center for useful tips and guides to master the basics.

Recommended: Construction Loans for Building a House

The Takeaway

How much does it cost to build a townhouse? In short, it depends on the type of townhouse, size, number of units, location, and added amenities. But you can estimate roughly $111 to $125 per square foot or $225,000+ for a 2,000 square-foot abode, not including land cost.

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FAQ

How many townhouses can fit on an acre?

The number of townhomes that can fit on an acre will depend on what’s permitted by local zoning, as well as space allocated for landscaping, parking, and other amenities. However, an acre can accommodate around 20 two- or three-story townhomes.

How much are utilities in a townhouse?

Utility costs vary by location, unit size, personal energy use, and equipment used for heating and cooling. Due to their smaller footprint, townhomes typically have lower utility bills than single-family homes.

Should I buy a townhouse or single-family home?

There are pros and cons with either type of home. Townhomes may require less maintenance and include extra amenities, while single-family homes can offer more space and discretion in how you design and decorate your home’s exterior.

What are the disadvantages of living in a townhouse?

Living in a townhouse can mean less privacy from your neighbors and noise from shared walls.

Photo credit: iStock/vkyryl

*SoFi requires PMI for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Minimum down payment varies by loan type.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

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The housing market is springing back—or is it?

Home sales soared in the spring and early summer months this year, but suddenly slowed in mid-summer. After that, sales in August fell for the second straight month, reaching the second-lowest pace of 2016.

They ended the month less than one percentage point higher that they were a year ago.

What’s the reason for the drop?

Observers list some reasons for the slower market, beginning with higher prices. Prices have risen 40 percent over the past three years, pushing many homes beyond the reach of buyers.

Among often-cited causes are the difficulties many buyers have had qualifying for mortgages in recent years. The fact is, though the approval rates for mortgages to buy homes are 50 percent higher than they were four years ago.

Currently, mortgage rates also remain at historically low levels, which makes homes less expensive than they would be otherwise for buyers using mortgages.

The housing supply may be the true culprit

The primary cause may simply be that there just aren’t enough homes for sale to meet demand.

“Hopes of a meaningful sales breakthrough as a result of this summer’s historically low mortgage rates failed to materialize because supply and affordability restrictions continue to keep too many would-be buyers on the sidelines,” said Lawrence Yun, chief economist for the National Association of Realtors.

The supply of homes for sale has been tight for the past three years and now is shrinking even faster. Total housing inventory at the end of August fell 3.3 percent to 2.04 million homes for sale, and is now 10.1 percent lower than a year ago (2.27 million).

Unsold inventory is a 4.6-month supply at the current sales pace, which is down from 4.7 months in July. Inventories in hotter markets and lower price tiers more popular with first-time buyers are twice as low as the industry average.

What is the solution?

“It is very concerning to see that inventory conditions not only show no signs of improving but have worsened in recent months from their already suppressed levels a year ago,” said Yun. “While recent data from the U.S. Census Bureau (link is external) shows that household incomes rose strongly last year, home prices are still outpacing incomes in many metro areas because of the persistent shortage of new and existing homes for sale. Without more supply, the U.S. homeownership rate will remain near 50-year lows.”

Yun has advocated stepped up new home construction to relieve the chronic shortages, but home production fell in August, and many builders are encountering shortages of skilled tradesmen, materials, and sites available for new construction.

Source: totalmortgage.com

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Is the housing shortage merely awful, or jaw-droppingly catastrophic? Depends on who you ask. The Harvard Joint Center for Housing Studies estimates that there’s a deficit of 1.5 million dwellings. Realtor.com says that we’re 2.3 million units short. Zillow says it’s 4.3 million, and the National Association of Realtors (NAR) guesses we’re shy 5 million to 6 million homes.

The Biden administration recently announced several programs to goose the construction of affordable housing. The efforts won’t situate everyone into a decent place that they can afford to rent or buy. But over the next few years, the programs could ease housing burdens for hundreds and maybe thousands of households.

The problem is that the federal government is engaging the situation with a polite nudge when true progress requires a rude shove. If Congress would increase funding and the White House would apply more imagination, the impact could be bigger.

Two main causes for the housing shortage

In five years, the median resale price of an existing home went up 51%, to $406,700 in July 2023, according to the NAR. Prices are too high for many would-be buyers. In early 2022, Freddie Mac polled Gen Z adults (ages 18 to 25 at the time), and 34% of them agreed that “homeownership at any point seems out of reach financially.” Mortgage rates have zoomed since that poll was conducted, making homes even more unaffordable.

Housing experts blame the shortage of low-cost housing on two primary factors: the cost of land and the expense of borrowing money to build. High lumber prices and a scarcity of construction workers are problems, too, but land costs and financing are the biggies that the Biden Housing Supply Action Plan addresses.

It’s expensive to develop and build

When builders talk of land costs, they mean more than the price of vacant acreage. They also refer to costs imposed by local governments: impact fees, zoning rules that limit the size and spacing of new homes, and wasted time while projects are delayed by legal challenges and political opposition.

It’s often a long, costly slog to get approval for housing, especially for dwellings for low-income households, apartments and other multifamily units. As the Harvard Joint Center puts it in its 2023 report on the nation’s housing: “The national housing shortage is also the product of local restrictive zoning policies and other regulatory barriers that make it difficult to build a range of housing types at different price points.”

Cities overwhelmingly zone land for single-family houses, effectively banning duplexes and apartments. Minimum lot sizes mean builders can construct only so many houses on a block, so they build expensive homes to maximize profits.

“Considering everything, they are saying, ‘Well, only way to make the numbers work, we are focusing on this larger-size home,'” the NAR’s chief economist, Lawrence Yun, said in a C-SPAN interview in early August.

Feds need to be firmer with local governments

Elected local leaders set the rules that drive up the cost of housing in communities blue and red. Several states, from California to Connecticut and Montana to Maine, have responded by restricting local governments’ land-use powers in order to promote multifamily and affordable housing.

Some housing advocates think the federal government should step in and compel local governments to make room for less expensive housing, such as apartments. In a March 2021 paper, Overcoming the Nation’s Daunting Housing Supply Shortage, Jim Parrott of the Urban Institute and Mark Zandi of Moody’s Analytics wrote that “federal policymakers should push communities to reorganize their approach to development from the ground up.”

The Biden administration adopted this approach. Its flagship program, Pathways to Removing Obstacles to Housing, dangles an $85 million pot of money. Local governments can receive grants from it to implement reforms that allow for denser housing, to plan transit-oriented development, to streamline permitting and to address gaps in financing, among other things.

It’s a well-meaning effort, with two problems: It lacks bite and it’s stingy. (The administration requested $10 billion and Congress appropriated $85 million.)

“It’s a nice idea, but, you know, we need some stick with the carrot,” says David Dworkin, president and CEO of the National Housing Conference. He means that the effort would be more effective if the federal government would withhold money from cities that refuse to relax zoning. Such an approach worked in the 1980s, when the feds threatened to deny highway funding to states that refused to raise the drinking age to 21. That was a shove, not a nudge — and it worked.

Playing hardball might yield results with housing, Dworkin says. “This is about having apartment buildings in communities, and duplexes or quadplexes, and the failure of communities to address the political pressure of residents who say, ‘I’ve got mine, no one else gets theirs,'” he says.

A miserly response to an expensive problem

As for the amount of money that Congress approved: In their paper, Parrott and Zandi imagined a federal program that would hand out $50 billion per year for 10 years to cities that “ease regulations and other building restrictions.” The generous program would increase affordable housing by 275,000 units per year, they estimated.

If $50 billion per year for 10 years would help solve the affordable housing shortage, the $85 million Pathways to Removing Obstacles to Housing program is laughably small. It’s as if Parrott and Zandi presented a $500 repair estimate, and Congress fished three quarters and a dime out of its pocket. If $50 billion in funding would result in 275,000 affordable homes, as Parrott and Zandi estimate, then $85 million would be good for 468 affordable homes.

The Department of Housing and Urban Development (HUD) said it will ask Congress for more funding.

Other programs address the housing shortage indirectly. The Department of Transportation will chip in money to local governments that extend public transportation to and from affordable housing, partly through zoning reform. The Commerce Department, when handing out Economic Development Administration grants, will favor development projects that allow people to live closer to work.

Making borrowing easier for developers

The other major way to stimulate the construction of affordable apartments is by making it easier and faster for builders to borrow money to fund their projects. HUD has come up with two solutions.

First, it has increased the threshold of what constitutes a “large loan” to build or rehabilitate apartments. The increase from $75 million to $120 million will reduce paperwork and costs to build or rehab large apartment complexes.

Second, HUD removed a $25 million cap on the size of FHA-insured loans on apartment construction that uses a streamlined Low-Income Housing Tax Credit (LIHTC). This means more apartment complexes will be eligible for the LIHTC, which reduces investors’ tax bills.

These tactics — loosening the purse strings to boost apartment building — might hasten construction for projects that have already won approval. But in the long term, this country can’t solve its housing shortage if cities and towns continue to use regulations to restrict new construction. If paying them to cut red tape doesn’t work, then state and local governments might have to withhold funding.

Source: nerdwallet.com

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Navigating the intricate process of buying a home in Ohio can be both exciting and overwhelming. Among the crucial steps that potential homeowners must undertake, a comprehensive home inspection is one of the most important. In this Redfin article, we asked some of the top Ohio home inspectors for their best tips for homebuyers navigating the process. So whether you’re considering buying a home in Columbus or a house in Cleveland – keep reading so you can make informed decisions and embark on your homeownership journey with confidence.

Why should you get a home inspection in Ohio?

Getting a home inspection in Ohio is essential for uncovering potential issues that might not be visible during a casual walkthrough. It provides crucial insights into the overall condition of the property, enabling you to make informed decisions and negotiate effectively before finalizing a home purchase. By identifying potential problems early on, you can avoid costly surprises and ensure a smoother transition into your new Ohio home.

Michael Hazlett of Clarity Property Inspections recommends getting a home inspection even if the home is brand new. “You absolutely should have any newly purchased house inspected, even if it’s brand new,” says Michael.“We find significant issues even in new construction.”

Dan Schuerman of Schuerman Inspections adds, “With market pressures continuing to make it difficult for Ohio buyers to secure an accepted offer, many have chosen to waive the home inspection process to gain the advantage against multiple offers. This practice can lead to problems after the purchase.”

What specialized inspections should Ohio buyers consider? 

“Most inspectors offer a general home inspection. This includes the most visible items in the home,” says Steven Mathis of Gold Star Inspections. “From checking the electrical panel to checking the plumbing for leaks.” 

However, aside from the standard home inspection, specific situations might demand specialized inspections. If issues are suspected during the general inspection, your inspector might propose a specialized assessment.

Jim Wendle of JW Property Inspection recommends that homebuyers always get inspections for termites and radon. 

“Another great idea is to have the sewer pipe evaluated with a sewer camera, especially if it’s an older home, since it’s one of the costliest systems to repair or replace,” adds Michael Hazlett of Clarity Property Inspections.

Are home inspections required in Ohio?

While they aren’t necessarily required, it’s advisable that all homebuyers get one for financial and safety reasons. 

“Are home inspections required? No, but they should be,” says Todd Engle of Good Eye Home Inspections. “Too many consumers are getting homes without inspections, causing safety and harm to them and their families. I understand the need and desire for a home, but waiving home inspections should never be considered. There are too many health and safety issues that we find lurking in homes that need to be addressed by the seller.”

How much does a home inspection cost in Ohio?

The cost of a home inspection in Ohio can vary depending on factors such as the size of the property, its location, and the complexity of the inspection. On average, a standard home inspection in Ohio ranges from $200 to $500. However, this price can change based on additional services or specialized inspections that may be required, such as radon testing, mold assessment, or termite inspection. It’s advisable to contact local home inspection companies to get accurate quotes tailored to your specific needs.

Can you sell a house in Ohio without an inspection?

Indeed, in Ohio, there’s no legal obligation for a formal inspection before selling a house. Nevertheless, it’s important to recognize that numerous buyers in the state typically anticipate or ask for an inspection during due diligence. Choosing a pre-sale inspection before listing your home can offer insights into its condition, enabling you to proactively tackle any concerns and showcase the property more positively to potential buyers.

Expert advice for Maryland homebuyers

“Water is the enemy of your home, as it causes almost all the damage, says Chris Stout of CBS  Home Inspection. “Water can cause issues with mold, wood-destroying insects, premature deterioration of building materials, and plumbing leaks.  Maintaining proper grading and watershed around the exterior of a home and keeping all exterior cellulose-based materials and entry points into the home properly sealed will help prolong the life of your home.”

Ohio home inspections: the bottom line

No matter how old or new a house is, it’s important to identify issues that might otherwise cost thousands of dollars to fix down the road. An Ohio home inspection will do exactly that, saving money down the road and giving you one less thing to worry about.

Source: redfin.com

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Unemployment rates are at their lowest level since 2000, while the economy is by all accounts running strong. But although these conditions might normally seem ideal for the real estate market, sales remain stagnant, with existing-home sales actually down by 1 percent year over year.

One of the main problems is low inventory, which means less competition for sellers and much faster sales than is normal. The average U.S. home will likely find a buyer under contract within just 26 days, according to a recent Realtor.com survey. That’s much faster than historical averages, which are usually around the 50 to 60 day mark.

“We’re in a bizarre world of a heated housing market where home sales are not rising,” National Association of Realtor’s Chief Economist Lawrence Yun wrote in his latest column at Forbes.com.

Yun said the lack of inventory is proving to be a challenge for real estate markets across the U.S., and said there was a desperate need for new homes.

“Whether it is the construction of affordable homes to meet first-time buyer needs, large-size homes to permit some existing homeowners to trade up, or developing an age-restricted retirement community, empty new homes will satisfy the rising housing demand,” Yun said.

He warned that just trying to get existing homeowners to sell simply won’t cut it, as many are not prepared to play what he called a “game of musical chairs” where they could find themselves without a place to sit once a sale has been made.

Yun said that many homeowners who might otherwise want to sell are refraining from doing so because they believe they’ll struggle to find a suitable new home once they’ve sold. He noted that the median length of time people stay in their home has grown to 10 years – previously, it averaged between six and eight years.

As such, Yun argues that new homebuilding is the only way to put the housing market back on track. He adds that it won’t just benefit the real estate industry, but also create new jobs, boost local economies and increase tax revenue. New construction will also help to make home prices moderate and boost the homeownership rate, Yun said.

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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Source: realtybiznews.com

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U.S. new-home sales rose in July to the highest level in over a year as homebuilders continue to benefit from limited supply in the resale market.

Purchases of new single-family homes increased 4.4% to an annualized 714,000 pace after downward revisions to prior months, government data showed Wednesday. The median estimate in a Bloomberg survey of economists called for a 703,000 pace.

With mortgage rates at the highest level in more than two decades, most homeowners are unwilling to move, keeping inventory on the resale market extremely limited. That’s encouraged prospective buyers to seek out new construction, and builders are also throwing in more incentives.

However, the recent pickup in mortgage rates is weighing on homebuilder sentiment and already translating into weaker demand. A report earlier Wednesday showed mortgage rates rose to 7.31% last week, the highest level since late 2000. That took a gauge of home-purchase applications down to the lowest level since 1995.

At the same time, a combination of tight supply and high costs continues to weigh on affordability. The median sales price of a new home climbed to $436,700 from a year earlier, according to the Commerce Department’s report. That’s well above pre-pandemic levels.

The number of homes sold in July and awaiting the start of construction — a measure of backlogs — declined to lowest level this year.

The data showed there were 437,000 homes for sale as of the end of last month. That represents 7.3 months of supply at the current sales rate, matching the lowest since early 2022.

Sales rose in the Midwest and West to the highest level since early last year, while they fell in the Northeast and South.

New-home sales are considered a timelier barometer than purchases of previously-owned homes, which are calculated when contracts close. Those sales fell to the lowest since the start of the year in July as inventory remained restrained, hurting affordability.

The new-homes data are volatile. The report showed 90% confidence that the change in sales ranged from a 8.4% decline to a 17.2% gain.

Source: nationalmortgagenews.com

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It’s hard out there for a homebuyer.

With inventories of existing homes for sale chronically low in most housing markets, buyers are at a disadvantage. With existing homes, buyers’ choices are fewer, and competition is stiff for affordably priced quality properties.

When it comes to negotiating, that means sellers usually have the upper hand. Buyers often encounter multi-bid competitions, low appraisals, lengthy negotiations, difficult sellers and unexpected surprises that can delay or lose a deal.

Home construction, meanwhile, is booming. Builders are offering a wider choice of price ranges and styles. Though new homes cost more, the difference might be worth it. New homes offer many advantages, including energy-saving construction and systems and modern design to fit today’s lifestyles.

New homes also are easier to buy than existing homes. A primary reason is that you are dealing with a builder whose goal is to sell a house and close a transaction expeditiously. The process is simplified when there is only one party to deal with, as opposed to a seller and their agent.

Here are some other reasons that buying a new home is easier.

1. You do not have to manage the transaction.

Builders are equipped to manage the transaction and usually have their own lenders and title companies that they prefer to work with and who know the builders and the properties in the development. Builders want their buyers to have a smooth and pleasant closing, so most have programs that make it easy for buyers to move from contract to closing, including getting approved for a mortgage.

2. Credits reduce closing costs.

Closing costs on a new house typically range from 2 to 4 percent of the sales price. A house that sells for $250,000, for example, could incur settlement fees from $5,000 to $10,000. Many builders offer significant incentives in the form of credits to help pay closing costs to buyers who use the builder’s preferred lender, even builders who are not affiliated with their preferred lenders. Closing cost credits can be substantial—as much as 2 or 3 percent of the purchase price.

3. Title fees are usually lower.

Because the builder does so many transactions with the same title company, home buyers who use their builder’s preferred title company encounter fewer perceived title issues with new construction. As a result title and escrow fees for new homes are usually much lower than for existing homes.

4. Problems are fixed before closing.

Getting an independent inspection of a new home is a good idea. Should your home inspector identify any problems, builders will fix them before you buy the home at closing. You will not have to deal with the dust and noise from repairs after you move it or the inconvenience of having to stay home from work while workers are in your house.

5. Warranties protect you.

If your inspection missed a costly problem or if a problem develops later with an appliance or system installed by the builder, most builders provide a free home warranty to pay for the costs of repair or replacement.

6. No move-in drama.

Your move-in will not be delayed by a seller who wants to rent back. You also probably will not need to pay for a fresh coat of paint or decorating costs before you move in a new home. You have already selected appliances and finishes that fit your style.

Source: totalmortgage.com