- Some builders are cutting prices or offering incentives to buyers to spur sales.
- See advice for ways to control costs on new home construction.
New homes are popping up in Delaware from the beach towns to Hockessin.
Now that the volatile housing market is beginning to normalize, it could be a good time to buy or build your new dream home. While mortgage rates continue to rise, prices for new construction are falling in some areas.
The National Association of Home Builders reported Feb. 15 that 31% of builders reduced home prices in the past month with an average drop of 6%, while 57% of builders offered some kind of incentive to buyers.
For newly built homes, “the sales prices for the buyer have plateaued,” said Bob Taylor, vice president of JS Homes, which builds in New Castle and Kent counties.
That’s even though costs of building materials with the exception of lumber have increased over the last year, Taylor said.
To help spur sales, some builders are absorbing some of the higher costs.
Five ways to save money and find your new home.
1. See if incentives are available.
To attract buyers, some builders may offer free upgrades such as higher quality materials or a free sunroom or garage.
2. Stick with a basic design.
In general, the more custom features you ask for, the higher the price. Many builders offer designs they have experience building that can be finished more quickly, using materials that have shorter delivery times.
3. Be flexible to keep the project on schedule.
You might have to be willing to accept materials that are in stock instead of your first choice.
“Siding, flooring, and cabinets are all items that can stop a job if the materials aren’t available when needed,” Taylor said.
4. Explore savings on interest rates and other fees.
Some builders work with lenders to offer mortgage loans with an interest rate lock that can protect buyers from rising rates, but also the ability to adjust to a lower rate if rates decrease.
The Delaware State Housing Authority has information about financing options and assistance with the down payment and closing costs.
5. Do the homework on your builder
More on real estate:Is 2023 the year to buy or sell a home? Here’s what the forecast looks like.
Taylor said find out how long a builder has been in business and look for customer reviews.
“The web is a powerful tool in researching a builder from social media to online reviews. Every review may not be positive, but ask your builder about it and give the builder a chance to explain what the issue was or what was learned from it,” he said. “Spend time with the sales manager and project manager and make sure you feel comfortable they will be supportive and attentive during the build process.”
And if time is an issue, find a builder who communicates with vendors frequently on what materials are available and which ones have longer wait times.
RWC, the Residential Warranty Co., recommends the following steps:
- Choose a builder who’s a seasoned professional. Ask questions about what they’ve built and check out the homes. If you’re thinking about building in a community with homes by that builder, ask the neighbors if they’re satisfied with their home and if they’d recommend the builder.
- When visiting the builder’s homes, look at the quality of workmanship and materials.
- Check if the builder has the proper licensing and insurance.
Reporter Ben Mace covers real estate, housing and development news. Reach him at rmace@gannett.com.