Spring home buying has officially begun and houses in the real estate market are already selling like pancakes. In response to this, there is an increase in new home construction to keep up with the demand for more homes.
The demand for homes in the market increases, as buyers are flocking the market in hopes of scouting a new home to live in. While this is a good sign for sellers, the same cannot be said for the buyers.
As the inventory of houses for sale remain tight, which led to an increase in the selling prices of homes. The good news, though, is that new home construction has increased in order to keep up with the demand for more options for buyers.
"We're seeing growth," said Realtor.com chief economist Jonathan Smoke. "That will help with the tight inventory."
The latest data from the U.S. Department of Commerce's residential construction report showed that there was 1.5 percent increase in the number of new homes being constructed in February. This was 17.5 percent higher than the number of new homes constructed in the same month in 2015.
The majority of the new homes being constructed were seen in the South. The increase in the construction of new homes may partly be due to the fact that there is a rise in the number of new corporations opening in the area, which opens up new jobs for its residents.
"It means they'll be bringing more people in. There will be a lot of people moving into the area to get the new jobs," said real estate broker Patricia Wilds.
As previously reported here on Realty Today, many buyers are now looking into buying their own homes, as mortgage rates are close to hitting its lowest in three years. The number of mortgage applications has seen a 10 percent increase last week, which further explains the reason for this crazy and busy spring home buying season.
