Buyers frustrated by the soaring price tags attached to new homes finally got a bit of a break. Finally.
The median price of a newly built home fell nearly 4.2% from May, to reach $310,800 in June, according to a joint report by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. Prices were also down almost 3.4% from June 2016.
“It’s good news for millennials, first-time buyers, and lower- and middle-income folks,” says Joseph Kirchner, senior economist of realtor.com®. “But we have to keep in mind that prices vary over the year.”
The price cuts aren’t unprecedented. In April, the median price was $309,500 before it shot up.
That bit of sorely needed financial relief might have helped boost the number of new-home sales in June by 0.8% compared with May and 9.1% year over year.
(Realtor.com® looked only at the seasonally adjusted numbers in the report. These have been smoothed out over 12 months to account for seasonal fluctuations.)
New homes are still significantly more expensive, about 17.8% more so, than previously lived-in abodes. (All those state-of-the-art, smart appliances and stylish finishes don’t come cheap.) Meanwhile, the median existing-home prices hit a record $263,800 in June, according to the most recent National Association of Realtors® report.
Despite buyers clamoring for more affordably priced homes, builders aren’t putting more of them up.
Only about 2,000 homes under $150,000 were sold in June, according to the Census and HUD report. That’s the same as it was in May, but up from about 1,000 homes in June 2016. Buyers also closed on about 6,000 homes in the $150,000 to $199,999 price range. That’s down from 7,000 in May, but the same as June of the previous year.
However, builders did erect about 19,000 new homes in the $200,000 to $299,000 range. That’s up from 16,000 in May and 15,000 in June 2016.
The most new homes were sold in the South, at 323,000. That’s a 6.1% decrease from May, but a 0.9% bump from June of the previous year. The most homes have been going up in the region as more people and companies are moving in due to its lower taxes and cost of living.
The West also had about 272,000 new homes go on the market—up 1.1% month over month and 11.9% year over year.
The Midwest had only about 66,000 new homes. That’s up 10% from the previous month, but down 12% from the previous year.
The Northeast, where land is scarcer and more expensive, had the fewest number of new homes go up, at just 41,000 in June. That’s the same as May, but up an astounding 41.4% from June 2016.