Zonda's report reveals a 1.2% increase in sales as rates drop, offering opportunities for entry-level buyers and prompting builders to explore more flexible pricing options.
NEWPORT BEACH, Calif. , Sept. 23, 2024 /PRNewswire-PRWeb/ -- More newly built houses are selling than a year ago, although prices have slipped slightly, according to new research from Zonda.
Zonda's New Home Market Update shows there were 720,627 new homes sold in August on a seasonally adjusted basis, a gain of 1.2% from July and 0.7% from a year ago. Meanwhile, national prices fell 3.1% for entry-level to $329,307, 2.2% for move-up to $517,938, and 0.3% for high-end homes to $911,064.
In August, mortgage interest rates averaged 6.5%, a full 35 basis points below just the month before and significantly lower than the 2024 high of 7.2% in May. While homebuilders weren't overly enthusiastic about sales in the month, total transactions weren't bad, says Zonda chief economist Ali Wolf.
"The hope is that lower interest rates will help pull more consumers off the sidelines in two main ways," Wolf says. "For a more cost sensitive entry-level buyer, lower interest rates can help ease the burden of the monthly mortgage payment. An existing homeowner, may feel more inclined to move up or move down as the gap between their current interest rate and market interest rates narrow."
A monthly Zonda survey further shows that 15% of builders lowered prices in August, 65% held prices flat, and 20% raised prices. Most builders are offering mortgage rate buydowns to help buyers get into a new home, with 50% of builders reporting they are willing and able to offer a buydown between the low-4%s and the low-5%s.
National quick move-ins (QMIs) totaled 30,578, up 7.7% compared to last year but 6.6% lower month-over-month. Total QMIs are 32.3% above 2019 levels. QMIs are homes that can likely be occupied within 90 days.
"For many consumers, QMIs provide a great option given the lack of resale supply," says Wolf. "Some builders have pivoted to a more spec-heavy strategy to help capture today's buyers. In some markets, however, resale inventory is rising and QMIs have become less desirable than 6 months ago."
For the full report, including data and analysis, click here.
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Media Contact
Steve Ladurantaye, Zonda Home, 613-725-7779, [email protected] , www.zondahome.com
SOURCE Zonda Home
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