Over the last 10 years, the price distribution of new homes has changed significantly, as new homes have grown more expensive. Builders blame a weakness among first-time buyers and rising regulatory burdens as the reason for the shift in focus in the pricier tiers of the new-home sector following the Great Recession.
The number of new homes that sold for less than $250,000 started to decline prior to the Great Recession. Sales in this segment have not returned to levels set in 2006, particularly for homes with prices below $149,000, according to an analysis by the National Association of Home Builders, detailed on its Eye on Housing blog.
Indeed, new homes that sold for $150,000 to $199,999 and those that sold for $200,000 to $249,000 dropped to a low during the recession. They have been on a slow, recovering pace ever since, the NAHB notes.
The main drivers in the new-home market are homes that sold above $250,000. New homes priced between $300,000 and $399,000 had the highest volume prior to the Great Recession and have been the fastest to recover since then, the NAHB notes.
Source: “New Home Sales Price History,” National Association of Home Builders’ Eye on Housing blog (April 4, 2017)