As of September 25, Davidson County had 768 active new construction or to-be-built listings, with a median asking price of $644,900. Existing homes offered more choices at a lower median asking price: 3,150 active listings at $499,000.
The gap was smaller among homes that sold in August. Buyers purchased 153 new homes at a median price of $545,000, compared with 537 existing homes at a median of $450,000. New homes spent an average of 85 days on the market, versus 62 days for existing homes.
Those figures show that new construction generally costs more in Davidson County. They do not, however, capture every cost a buyer should consider. With the average 30-year mortgage rate reaching 7.03% last week, the terms of a purchase can make a substantial
difference to the monthly payment.
Builders have a particular reason to help buyers bridge that gap: they need to sell the homes they are building. Nationally, 66% of builders reported using sales incentives in September, and 38% reported cutting prices. New single-family home sales rose an estimated 6.4% from July to August, although that national estimate is too uncertain to establish a clear month-to-month increase.
For buyers, an incentive might mean help with closing costs, a price reduction or a mortgage rate buydown. A temporary buydown lowers payments for an initial period; a permanent buydown lowers the rate for the life of the loan. Those offers can be valuable, but buyers should ask what happens when a temporary buydown ends and compare the full loan terms with offers from other lenders.
Sellers of existing homes may also negotiate on price or contribute toward closing costs. The opportunity is to compare each property on its total cost, including the purchase price, financing, taxes, insurance and any repairs. In a market where affordability remains a challenge, an existing home may still be the better fit, but buyers should give new construction a closer look before ruling it out.
Jack Gaughan is president of Greater Nashville Realtors. A Realtor is a member of the National Association of Realtors who subscribes to its strict code of ethics. You can reach Jack at 615-478-0970 or jack.gaughan@gmailcom.
This article originally appeared on Nashville Tennessean: New Nashville homes cost more. Here's how prices compare with existing homes
