Prior to the Great Recession that began in December 2007, new homes accounted for approximately 1 in 6 home sales.¹ The housing bubble burst led to a drop in new construction sales to around 1 in 10 home sales,¹ which has maintained a stubborn steadiness ever since.

Variability between purchasing new and existing homes is due to factors such as economic changes in particular regions of the country, availability of land, construction costs, etc. The April 2019 snapshot presented above¹ shows new home sales ranging from around 17% of total sales in Texas to just 1.8% in Massachusetts.

On average, 90% of homes sold in the U.S. are resales.¹

Showing your customers new construction has its obvious advantages — new appliances, low maintenance, up-to-date technologies and the ability to customize a home — but why, given these benefits, is the market virtually fixed with around 90% of home sales being resales?

10 reasons why homebuyers choose existing homes:

1. Greater inventory to choose from, so more options in terms of home style, size, layout, architectural detail, location and price
2. Less expensive, with the median price of an existing home costing nearly $100k less ($225k vs. $324k)¹
3. Appeal of moving into an established, tree-lined neighborhood with schools, shopping, entertainment and parks nearby
4. Smaller down payments — with 20% down, a buyer would have to save nearly $20k less
5. Negotiability of purchase price, given that a buyer negotiates with the homeowner, rather than a builder and investor
6. Constructed from more desirable materials, from hardwood floors and solid doors to stone or brick exteriors
7. Earlier availability, compared to moving into a new home months after touring a model unit
8. More for their money — an existing 2,000 sq. ft. home, based on current median pricing, costs $49 less per square foot than new construction
9. Ability to purchase a lower-cost fixer upper, where imagination and sweat equity eventually account for much of a home's individuality and value
10. Opportunity to own a larger lot

Even when working with clients who favor new construction, it may be worth expanding their options by helping them explore the distinctive benefits of existing homes.