In this week’s Real Estate section, The Washington Post highlighted increased demand for new construction homes. Post reporter, Carisa Crawford Chappell said, “New construction has become the saving grace for a growing number of buyers drawn into the market by historically low mortgage rates fighting over a dwindling inventory of existing homes. And now that unfulfilled demand for resale homes is spurring a boom in the home-building market.”
From Robert Dietz, chief economist at the National Association of Home Builders (NAHB), “Typically, new construction is mainly purchased by move-up buyers ages 35-55. In fact, five years ago, the first time buyer share of the new home market was less than 20%. Today, it’s closer to 30 percent nationwide.”
With the demand for new home sales higher than expected, especially by first time buyers, sales of new construction homes have risen by 18.8 percent.
Margeau Gilbert, a real estate agent with Exit Right Realty in Laurel, cites this type of demand is not new, however, the historically low interest rates “has exacerbated demand. Even in the midst of Covid-19, the market is on fire.”
In the article, Mark Zandi, chief economist at Moody’s Analytics, "expects home building to continue to ramp up because of low mortgage rates and an improving job market post-pandemic.”
In response to the article, Preston Innerst, EYA Marketing LLC's Senior Vice President of Sales, added:
The increase in new home sales activity is evident across all of EYA LLC’s new neighborhoods. Our infill locations with great accessibility have always seen strong demand, but we have seen a noticeable increase during last 6 months in on-line traffic, in person traffic, and sales at all of our communities - which is driven by low resale inventory, continued low interest rates, and a growing frustration with having to deal with the competition and bidding wars in the resale market. The demand has been strong across all price points, from $600s and $700s priced homes at Riggs Park Place and Michigan Park, to elevator townhome product over $1 million in communities such as Tower Oaks, Cabin John Village, and Reston Station. Even the very high-end luxury condo market has seen strong interest, with our Robinson Landing community having sold 5 condominiums from $2.8 million to $4.5 million during the last 90 days. In the current Covid environment, our purchasers are also expressing an increased desire for “new” over “used” homes.
To read the full Washington Post article, click here.
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