Hoping to buy a new home from a builder in 2022? Good news! With low levels of existing home inventory and still-surging buyer demand driving the need for more new construction, homebuilders are trying to build up their inventory to fill the gap.
New builds by the numbers
Let’s look at the numbers.
Last year, new housing numbers increased 15.6% over the year before with the start of construction on an estimated 1.6 million new homes. In addition, an estimated 1.3 million housing units were completed last year, both strong indicators that builders are working hard to meet more market demand with more inventory.1
And with new housing permits also up, many builders are confident the trend will continue. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI), which measures builder sentiment for newly built single-family homes, moved up to 84 in December. 2 That’s a great number to know, too, because anything above 50 means more builders view market conditions as good rather than not so good.
Bottom line, what all these numbers mean to you is more new homes becoming available this year!
Planning your new-build purchase
All that potential new inventory doesn’t mean you can move into your new-build home tomorrow, though. Builders are still playing catch up in many markets as they continue to face challenges due to inflation concerns and ongoing labor and supply chain issues. Higher material costs and lack of availability are also adding weeks or even months to typical single-family construction times in new housing developments, which in the best of times generally run between seven to eight months.3
While new home construction appears to be off to a strong start this year, the numbers add up to just a dent in current demand, so here are some tips for how to buy a new-build home.
Start planning early. Set a realistic timeline. Construction times vary a lot depending on the model you choose, the region you’re building in (weather can wreak havoc on the best laid plans), and availability of construction materials and crews. Best to build in a plan for delays, as all these factors could increase the chances of a longer timeline.
If you’re not a first-time home buyer, be sure to build in time for selling your existing home, too. Offerpad works with more than 50 of the top builders in the country* to help buyers overcome the contingency and uncertainty of having to sell their home before buying a new one. Working with builders like Taylor Morrison, the fifth largest4 and most trusted homebuilder in the country,5 you can sell your home to us* and:
- Receive a competitive cash offer on your existing home within approximately one hour(during business hours).
- Select a flexible closing date that aligns with the move-in date on your new home up to nine months out.
- Stay in your current home post-closing up to six months.
- Skip the cost of owning two homes.
- Enjoy a free local move (certain restrictions apply) when your new home is ready.
Stick to your budget. Shop home builders. Find those that offer incentives, such as special financing, warranties, free upgrades and other special deals to help you save money.
Here’s another tip for how to buy a new-build home. Buying a builder’s spec home may save you time and even more money. If not yet completed, you may be able to still pick some of your own finishes and features, depending on the stage of construction. And bonus! You could move into your new build home sooner than waiting for one to be built from the ground up.
Pad your budget a bit for upgrades. Some models are stocked with them and add to the cost of the base plan. Choosing upgraded construction materials like energy-efficient double-pane windows may be worth it, but do you really need those heated towel hangers?
Use your builder’s online design tools. One of the biggest holdups in the construction of your new home can be, well, you. Deciding on everything from home elevations to the kitchen sink can be overwhelming — and time consuming. Many homebuilders, like Taylor Morrison, make how to buy a new-build home easier with online design services and tools to help with all that decision making. Use them to design your dream home on your own or with the assistance of a design expert from the convenience of your couch.
Whether you’re planning on buying a new construction home or shopping for an existing home, Offerpad can help! Our streamlined buying and selling solutions are designed to help you find and get into the home of your dreams easier and faster. Get started here on offerpad.com.*
*Builders interested in working with Offerpad can find out more at https://www.offerpad.com/hba/.
1 Strong, Symone, “Housing Activity in 2021 Ends on Strong Note.” Jan. 19, 2022. Builderonline.com
2 Strong, Symone, Builder Sentiment Remains Strong at End of 2021.” Dec. 15, 2021. Builderonline.com
3Yazzie, Rebecca, “How Long Does It Take to Build a House: Is It Worth the Wait?” May 12, 2021. Better Homes and Gardens Real Estate homecity blog.
4As ranked by Builder Online’s 2021 Builder 100 list.
5Taylor Morrison received the highest numerical score in the proprietary Lifestory Research 2016, 2017, 2018, 2019, 2020, and 2021 America’s Most Trusted® Home Builder study. Study results are based on experiences and perceptions of people surveyed.