A new home on the market in DC.
Existing home prices are rising at a rate of 8 percent — much faster than incomes — but that’s nothing compared to the rise in new-home prices, The Wall Street Journal pointed out on Wednesday.
The National Association of Realtors’ chief economist Lawrence Yun said in a news conference on Wednesday that prices were rising too quickly given the disparity with incomes, a troubling sign for the housing market as a whole. But the 8 percent growth in existing home prices seen in March’s economic report isn’t too impressive when compared with prices in the new-home segment.
The price gap between new and existing homes has jumped to 40 percent, the Journal’s Real Time Economics blog noted. That’s partly because consumers have demonstrated a preference for new homes with fewer maintenance fees than old homes. But it’s also thanks to the rising share the priciest new homes are occupying in the segment.
Remember the $100 million spec house?
From Real Time Economics:
Although homes costing less than $300,000 still hold a slim majority of all new homes sold, the growth sector has been in more luxurious residences. Homes costing $500,000 or more accounted for almost 11% of new homes sold in 2014, up from 8% in 2011.
This article originally published at https://dc.urbanturf.com/articles/blog/the_gap_between_new_and_existing_home_prices_widens_to_40_percent/9799.
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