Are Existing Homes Really More Pricey Than New?
The median existing-home price for a single-family home in March jumped to a record high of $334,500, according to data from the National Association of REALTORS®. Meanwhile, the median sales price of a newly built home was $330,800, according to U.S. Census Bureau data.
New homes are traditionally more expensive than used homes. The scenario in which existing homes sell for more than a new home hasn’t occurred in more than 15 years, CNBC reports.
However, that doesn’t necessarily mean existing homes are more expensive, economists say.
“On a per-square-foot basis, within comparable markets, a new home is still priced higher than an existing home,” Robert Dietz, chief economist at the National Association of Home Builders, told CNBC.
Available housing in the existing-home sector lately may be skewing toward the higher price brackets. For example, the number of existing homes that sold in March priced between $100,000 and $250,000 fell by 10% compared with a year earlier. On the other hand, the number of homes priced between $750,000 and $1 million that sold increased by 82% compared with a year earlier, according to NAR data.
New-home construction is increasingly drawing more first-time home buyers, and some builders are starting to build slightly more entry-level homes to meet demand. First-time buyers were responsible for 43% of new-home sales in February, according to the National Association of Home Builders, higher than the 31% of existing-home sales first-time buyers purchased.
Regardless, the higher price tags for existing or new homes haven’t deterred home buyers.
“Consumers are facing much higher home prices, rising mortgage rates, and falling affordability; however, buyers are still actively in the market,” said Lawrence Yun, chief economist at the National Association of REALTORS®.