July 28, 2023
A house potentially haunted by the poltergeist of a long-deceased ex-resident will now cost you more than a brand-new place, upending the usual housing market order.
Axios reports that the median existing single-family home was going for $416,000 last month, while the median price tag for just-built ones was $600 lower.
The housing market typically prizes youth over history. Older homes have higher repair and energy costs, which lower their attractiveness to buyers—a Victorian with ornate molding is charming only until the roof starts leaking.
Why is old now pricier than new?
It's mostly about interest rates: Since the Fed kept hiking them, the average 30-year mortgage rate now sits at 6.81%, more than double its lowest point during the pandemic. That’s making current homeowners, many of whom snagged their mortgages before prices went into the stratosphere, reluctant to sell their pad and get saddled with a much more expensive mortgage for a new one.
This creates a shortage of pre-owned homes on the market but no shortage of aspiring homeowners. Some developers have signaled they’re more than happy to swoop in with more affordable homes for first-time buyers, and housing construction has begun to recover from a steep decline last year.
