Recent studies have shown that new home sales have been increasing lately, giving way to the highest rates we’ve seen in five years. While this has been happening, sales and listings of previously occupied houses have dropped slightly. For agents and brokers, does this means it’s time to start steering buyers toward the new housing market.
Although the sale of new homes represents only a small part of the housing market, it can be very beneficial to the economy, and for those in the real estate business. With an increase of new homes being sold, more builders will begin development in new areas, offering more jobs to those who are unemployed. In fact, with each new home built there are three new jobs created. In turn, these jobs will help stimulate the economy, allowing more people to buy homes, further benefiting the rising housing market.
In the month of June, sales for newly built houses rose by 8.3%, up to a seasonally adjusted annual rate of 497,000. This is an increase of 38,000 from the previous month, and 38% from the same month one year ago. This is the largest annual gain we’ve seen since 1992. While this is still well below the 700,000 we’ve seen while the market was healthy, an increase like this is a great indicator that the market is recovering.
With the increase of new homes on the market and the benefits which a new home provides, maybe it’s time for many to consider buying a new home rather than one which has been previously occupied.
However, this might not be realistic for mature markets where new homes aren’t an option. Maybe this is just another symptom of low inventory of previously owned homes.
What are your thoughts?
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