Builders Target Young Homebuyers With Less-Expensive New Houses

Big builders are starting to introduce new homes at lower price points in an effort to appeal to Millennials, who are finally starting to buy homes.

CNBC reports that the median price of a new house in March was $315,000, which is around $80,000 more than the median price of an existing home. The reason is because after the recession, builders focused more on constructing bigger homes for high-end buyers. Many new starter homes were also snatched up by investors and turned into rental properties.

D.R. Horton and LGI Homes have entry-level houses. Over the last few years, NVR, Tri Pointe, Meritage, The New Home Co., and MDC have introduced low-price options as well.

Builders may want to capture starter-home demand, but they know that will come at a cost to their bottom lines. … The only way for builders to lower prices and take that hit to margins is to see big growth in new orders for new homes.

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