Polly Wooldridge
From Your President of The Lynchburg REALTORS ® Association
Surging New-Home Prices Shut Out Low-End Buyers
Rising prices in new-home construction have mostly shut out buyers in the lower end of the market , shows a new analysis from the National Association of Home Builders . Buyers in the bottom one-fourth of the market have had to look exclusively at the stock of existing homes . However , fast-rising prices in the existing-home market may soon price out buyers as well .
The median price of a newly built single-family home that was started in 2020 was $ 336,000 . About 79 % of those homes were priced between $ 250,000 to $ 1 million . Almost none were priced under $ 150,000 , according to NAHB ’ s analysis .
However , the median price home shoppers expect to pay for a new home is about $ 265,000 , according to NAHB ’ s What Home Buyers Really Want survey of more than 3,000 recent and prospective home buyers . About one-fourth of survey respondents are looking to pay less than $ 150,000 . In 2020 , new construction was providing essentially no product for the bottom one-fourth of the home buying market , the NAHB acknowledges on its Eye on Housing blog .
Prices are rising even more in 2021 . The median price of a new home in May climbed 18 % year over year to $ 374,400 . The median price for an existing home in May was $ 350,300 , a nearly 24 % increase from a year earlier . Construction costs are rising and buyer demand is skyrocketing , leading to higher home prices in the new-home market .