If you’ve recently purchased a newly built home, you might want to think twice before putting it back on the market too soon. Recent data reveals a concerning trend that could impact homeowners who need to relocate within the first few years of purchase.
Get a Free Virtual Rental Evaluation Plus a Custom Cost Quote
The Numbers Tell a Story
According to recent analysis from Realtor.com, nearly 7% of homes built since 2023 are now worth at least 5% less than their original purchase price. This issue is particularly pronounced in the South, where 8% of new homes have lost significant value.
For context, that means sellers of newly built homes are more than twice as likely to take a loss compared to those selling existing homes during the same timeframe.
Why Is This Happening?
Two main factors are driving this trend:
Builder Price Cuts: As homebuilders adjust their pricing strategies and work through inventory, they’re often reducing prices on comparable models. When your neighbor’s identical home sells for less than you paid, it can drag down your property’s value.
Mortgage Rate Buydowns: Here’s where things get tricky. Many builders have been offering attractive in-house mortgage rates—sometimes nearly a full percentage point below market rates. While this can save you over $230 per month on a typical home, there’s a catch: these rates aren’t transferable.
When you go to resell, potential buyers have to qualify at current market rates. To achieve the same monthly payment your builder rate provided, you might need to drop your asking price by 10% or more. That’s a steep discount that could leave you underwater on your mortgage.
The Real-World Impact
Some of the nation’s largest builders are seeing concerning trends. Recent FHA mortgage data shows that 27% of loans from one major builder’s mortgage arm (originated between 2022-2024) are now underwater, with borrowers owing more than their homes are worth. Even the nation’s biggest builder has 18% of recent loans underwater—nearly double the rate of traditional lenders.
What Does This Mean for You?
If you’re considering purchasing a new construction home, here are some important considerations:
Read Our North Carolina Rental Owner / Investor Frequently Asked Questions (FAQ)
Read Our South Carolina Rental Owner / Investor Frequently Asked Questions (FAQ)
The Bottom Line
Most new homeowners aren’t planning to sell quickly, and many newly built homes are still appreciating in value. However, if life circumstances could force an unexpected move a job transfer, family changes, or financial shifts it’s crucial to understand this risk before signing on the dotted line.
For more information, visit New-Home Buyers May Struggle To Break Even on Quick Resale.
