Why Buying New Construction May Save You Thousands

Home builders are aggressively slashing prices and providing additional incentives for new home owners. The national median sales price of a new home was $401,800 in June, down 5% from May this year, while existing home prices rose to $434,300 making newly built homes a strikingly attractive option for anyone purchasing this year. 

Incentives from Meritage Homes and their preferred lenders are a perfect example of how these national home builders are attracting buyers. By offering closing costs and rate buy-downs, buyers are able to secure a 30 year mortgage with interest rates between 4.50-4.99%. These incentives save buyers cash on the purchase and reduce their monthly mortgage note.

We also see the Federal Reserve hold the federal funds rate steady between 4.25%-4.50% citing the potential impact of Trump’s tariff policy which they fear could stifle economic growth over the next few months, along with month over month inflation rising, and unemployment data remaining relatively steady. The last time the FED cut interest rates was December of 2024 and it does not seem as if they plan to provide additional liquidity or rate cuts in the near future. There still remains a possibility of a 0.25%-0.50% rate cut before the end of 2025, but I wouldn’t hold your breath. 

These economic factors are forcing builders to offer these additional incentives, and create an environment in which homeowners have to taper expectations of their perceived equity position.

Many homeowners and buyers remain locked in a market standoff, with contract cancellations on the rise — 15% of all deals fell through in June, and listing cancellations surged 47% year over year. Sellers are still demanding the price they want and homebuyers are unwilling to pay it unless the property is in pristine condition, prime location, and priced competitively. Nashville, specifically, has seen more than 1/10 homes fall out of contract in July. 

[Figure 1 below shows homes with contract cancellation rates above 10%]

If you’ve been thinking of selling this year it’s imperative that you price your house aggressively compared to the competition in your area. For example: Ratliff Real Estate just sold a home in Goodlettsville for $15,000 over asking in 3 days with multiple offers. The client hoped to get $350,000 for the home, but we priced the home at $339,900, yielding tons of interest and securing a contract at $355,000. Had we not priced the home slightly below expected market value, it’s very likely that we would have had less showings, less competition, and spent more time on the market like many of the other homes in the area. 

Give our team a call if you’ve been considering selling in 2025 and want to discuss strategy, pricing, and the market as a whole so we can help you successfully move to the next chapter smoothly and easily.