Newly built home prices $449,800 in March 2023. Can you afford this?
Time for a new home sales 2023 update. The latest Census/HUD report shows 9.6% more sales of newly built homes in March than February, but 3.4% fewer than March 2022. Total March new home sales was 683k annualized, which is 13% of all sales — sales of existing homes are the other 87%.
More important to you as a buyer is that median 2023 new home prices (blue line in first chart above) are $449,800.
Current new home prices of $449,800 are down $47,000 from the October 2022 peak of $496,800.
But this new home price is up $11,600 from February, and it’s up a second straight month.
Still, we’re below the peak, so this leads to 2 key questions:
1. Are builders offering good deals to buyers right now?
2. Can you afford this new home price of $449,800?
NEW HOME SALES 2023: ARE BUILDERS MAKING DEALS?
The good news is builders continue to make deals.
Builder confidence is up 4 straight months because they have good pipelines of new units they’re building.
Confidence in stocks of homebuilders is commensurate.
But short-term, builders are less confident in how fast they can sell completed homes.
This is good for homebuyers.
Here are deals builders are offering in April:
-59% of builders offered incentives to buyers in April.
-30% of builders reduced prices in April, compared to 31% in March and February.
-Average price reduction in April was 6%, the same as in February and March.
Incentives are things like seller credits at closing and home upgrades.
So you can make deals with builders.
You just need to ask.
2023 NEW HOME PRICES & AFFORDABILITY
Can afford today’s new home price of $449,800?
Here’s the answer:
– Monthly all-in cost on a $449,800 home purchase with 5% down and today’s rates of 6.625% would be $3580 (mortgage payment, insurance, taxes, mortgage insurance).
– If you had no other monthly debt, you’d need to make $99k* per year to qualify.
– If you had $600 in credit card, auto, and other monthly debt, you’d need to make $117k* per year to qualify.
Affordability is stretched but doable here, especially if there are two household incomes qualifying.
Also note: we show median instead of average because select outsized high prices skew the average higher.
As for existing homes, the median price is $375,700.
The link below contains affordability math on existing homes, which are 87% of all for-sale inventory.
Also see links with more on this new home sales 2023 topic.
Hit me with questions on new home prices and affordability.
– Existing home prices now $375,700. Is this affordable?
– 30% of builders reduced prices & 59% gave buyers deals in April
– March New Home Sales: Census/HUD report and NAHB econ team notes
*To arrive at these qualifying income numbers, The Basis Point uses 43% deb-to-income ratio that Federal regs allow for all mortgages of this size in America. We use Mortgage News Daily for rates.