New homes are generally more expensive than previously owned homes. That's not surprising. Anything brand new typically costs more than something used. But if you're a prospective home buyer who's been reluctant to consider buying a new house because of the price tag, the latest Housing Market Index from the National Association of Home Builders has good news for you.
The index – which is based on a monthly survey of home builders – found one in five say they've reduced their prices in the past month. Of course, the reason they've cut their prices is because affordability conditions have gotten more challenging this year. Elevated prices and rising mortgage rates reduced the number of buyers active in the market. However, for buyers who've remained active, price cuts could be an opportunity.
Robert Dietz, NAHB's chief economist, says buyers may see more stability in the months ahead. “As signs grow that the rate of inflation is near peaking, long-term interest rates have stabilized, which will provide some stability for the demand-side of the market in the coming months,” Dietz says.
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