Prices for newly built homes dropped 0.5 percent year-over-year to a median of $372,900 in the second quarter of 2019, according to a report from Redfin.
Redfin said the median sale price for existing homes rose 3.2 percent in the second quarter to $309,700, continuing a seven-year trend of increasing prices.
Additionally, sales of new homes increased by 0.8 percent annually in the second quarter; sales of existing homes dropped 0.7 percent during the same period.
“The moderation we’re seeing in new-home prices was expected and follows right along with our observation late last year that builders were finally shifting their focus toward offering smaller, more affordable homes,’ Redfin Chief Economist Daryl Fairweather said in a release. “While this change was a clear and long-needed response to homebuyer demand and tastes amid an affordability crisis and a softening market, it also means that builders are now focused on homes that are less profitable for them.”
“As builders continue to adjust to a less favorable market, along with rising tariffs for building materials and a labor shortage, I expect to see new-home inventory stay low overall,” Fairweather added. “But low mortgage rates and more affordable prices for new homes mean sales could strengthen a bit in the coming months.”
According to the report, the places where prices for new homes rose the most during the second quarter were Greensboro, S.C. (26.8 percent); El Paso, Texas (12.8 percent); and Baton Rouge, La. (10.4 percent).
Redfin said places that had large declines in new-home sale prices during the second quarter included San Jose, Calif. (-26.6 percent); West Palm Beach, Fla. (-16.7 percent); Honolulu (-13.6 percent); Miami (-13.5 percent); San Diego (-12.5 percent); and Los Angeles (-8.7 percent).