The “Great Recession” that began in December 2007 affected every American in one way or another. It led to layoffs, bankruptcies, and foreclosures. Although several factors culminated in the recession, the most significant catalyst was the bursting of the housing bubble.
According to the U.S. Census Bureau, housing prices in the U.S. steadily rose between the early 1960s and the early 2000s. The sharpest increase occurred between the years 1998 and 2005, when the median and average costs of new homes ballooned from $152,500 and $181,900 to $240,900 and $297,000, respectively. In 2007, the median and average new housing prices peaked at $247,900 and $313,600.
Ultimately, the stress caused by high housing prices and unwieldily mortgage debt burdens led to the infamous housing bubble burst. By 2010, statistics show that median and average housing prices decreased to approximately $221,800 and 272,900, which were on par with 2004 prices.
In mid-2013, Bloomberg News reported that there are more new houses being built this year than any time during the previous four years. In fact, the National Association of Home Builders claims that there are plans for more than 930,000 new home building projects to be completed by the end of 2013. All of this is good news to people looking to buy or build a new home.
For first time home buyers, the most important thing is price. While there are exceptions, first time home buyers typically have less capital and equity than more experienced home buyers. This is understandable, because they have never owned a home, and is why lender offer first home buyers savings accounts and first home buyers programs.
While many first time home buyers will purchase existing homes, others may choose to build custom homes. Depending upon on buyers’ visions, budgets, and their first home buyers savings accounts, the best home builders can offer everything from single story and two story homes to new luxury home options. While both options have their advantages and disadvantages, new homes are usually more energy efficient, and give buyers the opportunity to choose floor plans that are ideal for them.
Whether prospective home buyers are interested in existing homes or building custom designs, housing industry statistics indicate that it is once again a great time to invest in a new home. For most home buyers the most difficult part might be choosing the best options for them. But it sure is good to have choices.