Housing market reaches milestone last seen in 2009 that's good news for homebuyers
The number of newly built homes on the market is at the highest level it has been since 2009.
Home builders are struggling to find buyers in the frozen housing market, as elevated interest rates disincentive existing owners moving, and keep mortgages out of reach for many first time buyers.
Coupled with house prices remaining at their most unaffordable level in recent history, the result is an unusually high inventory of new-build homes available.
Home builders are offering discounts and perks as they try to offload them, according to Marketwatch.
The typical home buyer cannot afford to pay current prices and current interest rates on a mortgage.
The average 30-year mortgage rate is at 6.77 percent, as of June 26 and the median price of a new home sold in May was $426,600.
The 'Oracle of Wall Street' Meredith Whitney previously told DailyMail.com that rates need to drop below 6 percent to kickstart the housing market.
'The big story in the housing sector remains the inventory situation,' Stephen Stanley, chief economist at Santander U.S wrote in a note to investors.
Stanley says the inventory is now 'bloated' and has been since last spring when the market tends to pick up pace.
Despite builders efforts to entice buyers, success has been limited, according to Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.
'Mortgage rates remain too high for sales to climb significantly higher, while the softening labor market likely will limit the flow of potential home buyers,' Allen wrote in a note.
'With housing payments at an all-time high, many buyers are feeling priced out,' Redfin chief economist Daryl Fairweather told DailyMail.com earlier this year.
'But sellers still need to move, which means they're increasingly offering concessions to get deals done — especially on condos and townhomes.'
Major builder Lennar have said they will look to lower prices in order to move its existing inventory.
And Lennar is not alone. Around 30 percent of builders cut home prices in January, the National Association of Home Builders (NAHB) reported — by an average of 5 percent.
Home builders are struggling to find buyers in the frozen housing market, as elevated interest rates disincentive existing owners moving
Home builders are offering discounts and perks as they try to offload new homes
61 percent of builders also offered sales incentives in January, the NAHB survey revealed.
Incentives include mortgage-rate buydowns and smaller floor plans.
Sales of newly built homes did grow in 2024 compared to 2023, according to federal government data, but inventory remains elevated.
By contrast, 2024 was the worst year for sales in 30 years for the resale home market.
Inventory in the resale home category is also rising, up 16.2 percent from a year ago, which gives buyers more options too.
The South and West of the country are the most attractive regions for prospective new construction buyers, a new report from Realtor.com revealed.
The regions have larger shares of new build homes available on the market, lower new construction premiums, and more opportunities for mortgage rate buydowns, the report found.
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