A recent report by Zonda highlights an increase in new home sales in November, showing that 23% of builders resorted to price cuts—up from 18% in October.
This shift comes amidst a backdrop of various market dynamics, including the anticipation of the 2024 presidential election, potential future falls in interest rates, fluctuating mortgage rates, and persistent worries about housing affordability.
These factors have understandably made prospective homebuyers more hesitant about making a purchase.
However, Zonda’s report suggests a silver lining: consumer confidence in the housing market is beginning to rise in the wake of the election.
Post-Election Dynamics
In its November 2024 New Home Market Update, Zonda, a firm specializing in construction data analysis, revealed some intriguing trends.
Specifically, about 10% of builders noted a resurgence in buyer activity as the election concluded.
While some builders experienced a slow beginning to the month, sales momentum significantly picked up after the election.
When diving into pricing strategies, Zonda’s findings from November are telling.
It reveals that 23% of builders opted to lower their prices, while 68% chose to keep prices steady, and a mere 9% increased them.
This marks a notable increase in price reductions compared to October, when 18% of builders adjusted prices downwards, 69% held their pricing firm, and 13% raised them.
Incentives and Sales Trends
Ali Wolf, Zonda’s chief economist, pointed out the critical role that incentives played in propelling new home sales during November.
The data showed that a staggering 75% of new home projects offered various incentives, particularly for buyers seeking quick move-in options.
There was a palpable shift in how consumers approached the market in November; it seemed that the end of the election cycle encouraged them to re-engage.
Zonda reported a noteworthy uptick in new home sales activity overall, with November sales climbing by 15.7% year-over-year and up 17% compared to figures from 2019.
The organization recorded a seasonally adjusted annual rate of 740,636 new homes sold in November, showing a 3.1% increase from the previous month.
Price Dynamics in the Market
The analysis from Zonda categorized homes into three main price brackets.
The high-end segment saw its average price increase to $913,999, reflecting a modest year-over-year rise of 0.4%.
In contrast, entry-level homes saw a decrease in average price by 2.2%, settling at $327,682, while middle-tier move-up homes dropped by 1.3%, averaging $517,479.
This dynamic landscape in the housing market underlines both the shifting strategies of builders and the evolving sentiments of buyers as they navigate their next investment.
Source: Housingwire