New-Home Prices Hit Record High
The median price for a new single-family home reached a record high in May of $345,800, the Commerce Department reports. Buyers will be paying a huge premium for new construction, as new-home prices are now 16.8 percent higher than they were a year ago.
So far, however, the higher price tags don’t seem to be spooking home shoppers. In May, 61,000 new homes were purchased—a 2.9 percent increase from April and an 8.9 percent increase from a year ago, the Commerce Department reports. “Builders are focused on the mid to upper end of the housing market,” says Joseph Kirchner, realtor.com®’s senior economist. “It means that it will be more difficult to find more affordable homes for first-time buyers, millennials, and low-income people.”
Only 6,000 newly constructed homes sold in May were priced between $150,000 and $199,999. Further, there were about 14,000 sales in the $200,000 to $299,999 range. New homes now cost about 36.8 percent more than previously existing homes, which also reached record-high prices in May.
Regionally, new-home sales increased the most in the West last month, posting a 13.3 percent month-over-month jump, followed by a 6.2 percent increase in the South. New-home sales, meanwhile, fell 10.8 percent in the Northeast and plunged 25.7 percent month-over-month in the Midwest.
Source: National Association of Home Builders and “New Homes Just Keep Getting Pricier, But Buyers Keep Coming,” realtor.com® (June 23, 2017)