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The traditional price gap between new and existing homes was nearly nonexistent at the end of 2024. The median price for a new single-family home sold in the fourth quarter of 2024 was $419,200, a mere $9,100 above the existing home sales price of $410,100, according to U.S. Census Bureau and National Association of Realtors data (not seasonally adjusted – NSA).

Typically, new homes carry a price premium over existing homes. However, for the first time in the quarterly data since 1989, the median existing home price exceeded the new home price in the second quarter of 2024, and again in the third quarter of 2024. The average price premium of new home sales over existing home sales for 2024 was $8,725. To put this into perspective, 2023’s premium average was $33,750 and the 10-year average is $50,657.

Both new and existing homes saw dramatic price increases post-pandemic due to higher construction costs and limited supply. Although overall home prices remain elevated compared to historical norms, new home prices have moderated due to builder business decisions, while existing home prices continue to increase due to lean supply.

The median price for a single-family new home sold in the fourth quarter of 2024 decreased by 0.95% from the previous year. New home prices have continued to decline year-over-year for the previous seven quarters.

Meanwhile, the median price for existing single-family homes increased 4.80% from one year ago. Existing home prices have continued to experience year-over-year increases for six consecutive quarters.

There are several factors as to why new and existing homes are selling at similar price points. Tight inventory continues to push up prices for existing homes, as many homeowners who secured low mortgage rates during the pandemic are hesitant to sell due to current high interest rates.

Meanwhile, new home pricing is more volatile – prices change due to the types and locations of homes being built. Despite various challenges facing the industry, home builders are adapting to affordability challenges by selling smaller lots, constructing smaller homes, and offering incentives.

Additionally, there has been a shift in home building toward the South, associated with less expensive homes because of policy effects. In the fourth quarter of 2024, the percentage of new homes sold in the South was 63%, compared to 44% of existing homes (NSA).

The least expensive region for homes in the fourth quarter was the Midwest, with a median price of $368,000 for new homes and $304,800 for existing homes. The South followed closely, with a median new home price of $377,200 and an existing home price of $366,800. New homes were most expensive in the Northeast with a median price of $798,000, while the West sold at $560,000. However, for existing homes, the West led as the most expensive region at $633,500 homes, followed by the Northeast at $487,900.

The new home price premium was most pronounced in the Northeast, where new homes sold for $310,900 more than existing homes. In contrast, the South saw little difference with a modest $10,400—similar to the national trend. Uniquely, this pattern reversed in the West, where existing homes were $72,600 more than new homes.

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An expected impact of the virus crisis was a need for more residential space, as people used homes for more purposes including work. Home size correspondingly increased in 2021 as interest rates reached historic lows. However, as interest rates increased in 2022 and 2023, and housing affordability worsened, the demand for home size has trended lower. As markets expect some decline for long-term interest rates, will new single-family home size reverse and move higher in 2025? Data from the end of 2024 suggests this may be occurring.

According to fourth quarter 2024 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area was 2,205 square feet, the highest reading since mid-2023. Average (mean) square footage for new single-family homes registered at 2,417 square feet.

The average size of a new single-family home, on a one-year moving average basis, trended higher to 2,373 square feet, while the median size is at 2,162 square feet.

Home size increased from 2009 to 2015 as entry-level new construction lost market share. Home size declined between 2016 and 2020 as more starter homes were developed. After a brief increase during the post-COVID building boom, home size has trended lower due to declining affordability conditions. As interest rates decline, new home size could level off and increase on a sustained basis in the quarters ahead.

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NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates gains for custom home builders after a period slight softening of market share. The custom building market is less sensitive to the interest rate cycle than other forms of home building.

There were 47,000 total custom building starts during the fourth quarter of 2024. This marks a 7% increase compared to the fourth quarter of 2023. Over the last four quarters (2024 as a whole), custom housing starts totaled 181,000 homes, just below a 2% increase compared to the prior four quarter total (178,000 in 2023).

Currently, the market share of custom home building, based on a one-year moving average, is approximately 18% of total single-family starts. This is down from a prior cycle peak of 31.5% set during the second quarter of 2009 and the 21% local peak rate at the beginning of 2023, after which spec home building gained market share.

Note that this definition of custom home building does not include homes intended for sale, so the analysis in this post uses a narrow definition of the sector. It represents home construction undertaken on a contract basis for which the builder does not hold tax basis in the structure during construction.

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Nearing retirement, this Vienna, Virginia, couple decided their Craftsman-style home was ready for a glow-up. The largest part of the project was adding a pool and an addition with a sunroom and a bathroom. The architect who had designed their house back in the 1990s, Dwight McNeill, recommended Winn Design + Build for the job. “Along with the pool and additions, they also gave us a list of ‘Well, while you’re here … ’ things to do,” firm owner Michael Winn says.

That list included adding a single-car garage, a breezeway to connect the house to their existing two-car garage, and new landscaping, fencing, gates and arbors; sprucing up their front porch; replacing all the trim and some of the siding and roofing on the house; and painting the home’s exterior. The result is a home that’s a little larger, has a better backyard to enjoy and feels all freshened up.



This article was originally published by a www.houzz.com . Read the Original article here. .


After three months of increases, existing home sales retreated in January from the 10-month high last month, according to the National Association of Realtors (NAR). Sales continued to be suppressed by higher mortgage rates, which remained above 6.5% despite the Fed cutting rates by 100 basis points last year. The persistent high mortgage rates largely reflect policy uncertainty and concerns about future economic growth.

While existing home inventory improves and the Fed continues lowering rates, the market faces headwinds as mortgage rates are expected to stay above 6% for longer due to an anticipated slower easing pace in 2025. The prolonged rates may continue to discourage homeowners from trading existing mortgages for new ones with higher rates, keeping supply tight and prices elevated. As such, sales are likely to remain limited in the coming months due to elevated mortgage rates and home prices.

Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, fell 4.9% to a seasonally adjusted annual rate of 4.08 million in January. On a year-over-year basis, sales were 2.0% higher than a year ago. This marks the fourth consecutive month of annual increases.

The first-time buyer share was 28% in January, down from 31% in December but unchanged from January 2024.

The existing home inventory level rose from 1.14 million in December to 1.18 million units in January and is up 16.8% from a year ago. At the current sales rate, January unsold inventory sits at a 3.5-months’ supply, up from 3.2-months last month and 3.0-months a year ago. This inventory level remains low compared to balanced market conditions (4.5 to 6 months’ supply) and illustrates the long-run need for more home construction.

Homes stayed on the market for an average of 41 days in January, up from 35 days in December and 36 days in January 2024.

The January all-cash sales share was 29% of transactions, up from 28% in December 2024 but down from 32% in January 2024. All-cash buyers are less affected by changes in interest rates.

The January median sales price of all existing homes was $396,900, up 4.8% from last year. This marked the 19th consecutive month of year-over-year increases. The median condominium/co-op price in December was up 2.9% from a year ago at $349,500. This rate of price growth will slow as inventory increases.

Geographically, three of the four regions saw a decline in existing home sales in January, ranging from 5.7% in the Northeast to 7.4% in the West. Sales in the Midwest remained unchanged. On a year-over-year basis, sales grew in three regions, ranging from 1.4% in the West to 5.3% in the Midwest. Sales were unchanged in the South from a year ago.

The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell from 78.5 to 74.2 in December due to elevated mortgage rates. This marks the first decline since August 2024. On a year-over-year basis, pending sales were 5.0% lower than a year ago, per National Association of Realtors data.

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This article was originally published by a eyeonhousing.org . Read the Original article here. .





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www.houzz.com . Read the Original article here. .



Architectural designer Tim Tice had lived in Bethany Beach, Delaware, his whole life, but he and his wife had never quite found their dream home. Recently, they decided to search for a lot that overlooked the water and build from the ground up. They bought land along the Salt Pond, an inland, estuarine body of water located about three-quarters of a mile from the beach. The lot had challenges, including bringing water and sewer services to the site. Tice was also careful to place the home the proper distance from nearby wetlands and to make sure they were protected during the construction process.

As for the house, the couple wanted a home where their children would grow up, but they were also thinking about how it would function for them once the kids flew the nest. As someone born and raised in the area, Tice wanted the design to nod to his favorite “old-school” Bethany Beach cottages while also having a more modern and minimalist design.



This article was originally published by a www.houzz.com . Read the Original article here. .



This unique 1960 home in a suburb of San Antonio, Texas, was designed by architect Robert Harris for Bernard Lifshutz, a prominent San Antonio real estate developer, civil rights activist and historic preservationist. The home changed hands several times over the years, and with each renovation, the original midcentury modern features were stripped away a bit more.

The current owners, who are big fans of midcentury design, contacted Jana Valdez of Haven Design and Construction after seeing one of the company’s projects online. They wanted to improve the home’s layout, including making changes to the kitchen and primary suite, and resurrect the home’s midcentury features. “They called us pretty quickly after purchasing the house because they knew immediately that they needed a solution for the primary closets being in the main hallway of the house, and they really wanted a walk-in pantry in the kitchen,” Valdez says.



This article was originally published by a www.houzz.com . Read the Original article here. .



This unique 1960 home in a suburb of San Antonio, Texas, was designed by architect Robert Harris for Bernard Lifshutz, a prominent San Antonio real estate developer, civil rights activist and historic preservationist. The home changed hands several times over the years, and with each renovation, the original midcentury modern features were stripped away a bit more.

The current owners, who are big fans of midcentury design, contacted Jana Valdez of Haven Design and Construction after seeing one of the company’s projects online. They wanted to improve the home’s layout, including making changes to the kitchen and primary suite, and resurrect the home’s midcentury features. “They called us pretty quickly after purchasing the house because they knew immediately that they needed a solution for the primary closets being in the main hallway of the house, and they really wanted a walk-in pantry in the kitchen,” Valdez says.



This article was originally published by a www.houzz.com . Read the Original article here. .

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