Good news for buyers who cannot seem to find their dream home in the real estate market: new home construction has increased to keep up with the demand. Should you go for a newly constructed home than a refurbished one?
About 1,178,000 new homes were being constructed across the country in February. This is 30.9 percent higher than the new homes constructed in the same month last year, Realtor.com reported.
The increase in the construction of new homes is said to be due to the increase in demand.
"It means that home builders are responding to the demand out there," said the publication's chief economist, Jonathan Smoke.
According to Smoke, there is not enough supply of houses in the real estate market to keep up with the increasing number of buyers. Smoke, however, expressed concern over the 3.1 percent drop in the permits secured from January to February.
The said drop may be due to the fact that developers are already having a hard time looking for available property and the effort it takes to build new homes than to rebuild or refurbish an existing one.
The chief economist of the National Association of Home Builders, David Crowe, also told the publication that most builders focus on luxury housing because first-time homebuyers rarely purchase a new house.
Crowe, however, noted that builders must realize that first-time homebuyers make up 40 percent of the market, which is why they must respond to the demand and construct more new homes. Unfortunately, not everyone can afford to pay the price of a new home, so builders should try to keep pace with the demands of the prospect buyers.
As previously reported here on Realty Today, experts in the industry were already expecting for the rise in new-home construction this 2016.
The number of housing permits also significantly increased from January 2015 to January 2016. This would then lead to an increase in the construction of newer homes as a permit is the first step in the process.
