According to Redfin, new constructions are becoming more expensive than ever while pre-owned home sales prices are going down. Check new construction value in data center.

What would explain this trend?

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Cost of supplies and labor is up driving construction costs up, interest rates are up leaving more people to stay in their current homes on their lower rate mortgages

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The cost of renovating and finding available contractors these days is so high. People probably figure they might as well just start the whole house a new.

You are 100% paying a premium for new construction. Supply chain issues, material costs, labor shortage - just a glimpse at what’s driving those inflated prices.

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I guess I expected supply issues to push up used and new home sales prices together, albeit at different rates

That’s not exactly what Redfin is saying. They’re saying that 1 out of 5 sellers is dropping their price which is the highest rate since 2019. That is a bit misleading, because home prices are still up 16% year over year

So imagine this: sellers are putting out “extremely expensive” asking price, then bringing it down to a more reasonable “very expensive” asking price

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Interested as well

For me, the existing homes I was interested in were going to require so much work and the prices IMO were inflated for houses that needed work. I found it a better deal to purchase a tear down house and build anew. Easier to get contractors for a whole house build than to try and get various contractors for various jobs.

We ended up buying a new home as well. In the town we were looking at the price difference between new and existing was about 10%. Made more sense to go new at that point. Plus long term, home values tend to increase more with new builds…especially if you buy In early.

Materials for one. Lumber and drywall especially. Skill laborer shortage, having to pay people more to work. Rise in fuel cost. It's everything.

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