There have always been terrific reasons to consider buying a new construction home, whether for first-time buyers, upgraders, downsizers, multigenerational families, active 55+ adults and more.

But recent economic conditions have added some newer reasons to consider buying new.

For buyers eager to get into a new construction home as quickly as possible, higher interest rates over the past several months aren’t all bad news.

That’s because higher interest rates have, in some cases, made homes more readily available to certain buyers.

Builders offer new incentives

You’ve probably read the news that interest rates have led to so-called builder cancellations in recent months. How can builder cancellations be good news? It depends on the buyer’s position and reasons for moving into a new construction home.

First, let’s define builder cancellations: The term refers to when buyers cancel their purchase agreements with builders, not the other way around. Today’s higher interest rates have led to caution, inability or delay for some buyers to purchase a home.

But that same caution has put other buyers in a strong position to take advantage of new builder incentives.

In some cases, those incentives now include much more than special financing programs through builders’ established relationships with lenders.

Cash is still king. Some builders now offer their approved buyers as much as $50,000 either in the form of price reductions, cash back or spending toward payments, upgrades or new-home options.

Working with a builder’s lending partner is also more favorable now. These lending partners know and trust the builders and may be able to provide unique financing products to approved buyers.

Inventory homes are hot 

Builders typically provide special incentives for inventory homes, which also may be called move-in-ready homes or quick-move-in homes. But these days, with homes selling more slowly, some builders have gained new cause to move those homes more quickly than usual.

Those who are planning to resell a primary home in California for an upgrade or for downsizing may find unexpectedly attractive pricing on new construction homes, especially inventory homes. By preparing the resale home for sale and pricing it competitively, buyers can enjoy a turnkey move in at a new construction, move-in-ready home.

In addition, those unexpectedly available inventory homes often include existing upgrades and options above and beyond builders’ standard offerings. Model homes, for instance, typically feature the finest materials in a builder’s design center, meaning buyers may get more or higher-grade design elements for less.

Multigenerational buyers may be in luck 

Over the past several years — and especially since 2020 — builders have increasingly incorporated multigenerational lifestyle conveniences in their home plans.

Nowadays, in spite of interest rate increases, buyers who favor those home plans may be able to work with builders and lenders for innovative financing.

For instance, a larger down payment can translate to a lower mortgage interest rate or no mortgage at all, especially when two or more generations combine financial resources for the purchase.

Or, by carefully considering location and quality of life, larger homes in areas on the periphery of the Bay Area may be available at prices that may help multigenerational buyers avoid a mortgage.

Before making a combined purchase or an all-cash offer, involve your bank or financial planner in a detailed discussion on the benefits and any risks involved, relative to your particular situation.

New, safer construction 

Since 2021, buyers have discovered an increase in homes built with improved, fire-resistant and preventive construction features. The homes are not only attractive, but safer in historically dry California.

The new practices, some of which have risen from 2021 and 2022 amendments to the California Building Code by the state fire marshal and the Department of Housing and Community Development, include:

More defensible space around homes: Vegetation, including lawns, hedges, trees and bushes, is placed several feet away from the home, typically 5 to 30 feet away, or as much as 100 feet, depending on the type of structure. Gravel, brick and stone are used for planter beds at homes that include these.

Sprinkler systems: Hidden in the ceilings of new construction homes, and even in places such as the garage and in some outdoor spaces, sprinklers automatically activate in the presence of an internal temperature of 165 degrees Fahrenheit or higher.

Outdoor smoke detectors: As a substitute for some outdoor fire sprinklers, the updated building standards require installation of smoke detectors in key outdoor locations.

Roof venting shields: Special mesh-type shielding material is installed in, on or around roof vents to help ensure embers do not enter through the roof and, by extension, the home.

What’s in it for you to purchase a new home during these changing real estate times? Ask every builder you meet. They’ll be happy to share.