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2023 saw massive expansion of new construction homes. This trend is expected to continue in 2024, with homebuilding offering incentives and customizability in a high-interest, low inventory market. 

Why is Homebuilding So Popular?

Compared to existing homes, new construction single family homes offer several advantages to potential buyers:


Overall, new builds are cheaper than existing homes. Forbes reported that the average national cost for homebuilding was $418,000 last quarter compared to $520,000 for pre-owned properties. 


At an average of around 7.4% for a 30-year fixed loan, mortgage interest rates are the lowest they’ve been in six months. However, some 90% of current homeowners are locked in at rates below 6%. This has resulted in something called the “locked in effect,” with homeowners electing hold off on selling until interest rates are at or below their current ones. 

As a result, inventory for existing homes is extremely limited. Homebuilding allows you to purchase a property you love in the face of otherwise very limited options. 


Today’s homebuyers often seek tailored living spaces that cater to their unique lifestyle needs. New construction homes provide the opportunity to customize layouts, select materials, and incorporate the latest smart technologies, allowing individuals to create their dream dwellings from the ground up.

Homebuilding Incentives

Homebuilders often offer incentives to the tune of tens of thousands of dollars in order to offload inventory and speed up a sale. It is often enough to cover things like closing costs plus a few upgrades (switch to those stainless steel appliances, maybe?), or even buy down the mortgage for a better monthly payment and interest rate. 

Drawbacks of Homebuilding

There are different types of homebuilding, each with varying timelines and levels of involvement/investment: 

Production Homes

This type of homebuilding involves constructing multiple, similar-looking units on plots of land that have been purchased by the builder. Prospective buyers can customize a little by choosing a floor plan, carpeting, paint colors, and other cosmetic features and fixtures. This is a good option for first time homebuyers, since the builder knows how long the project will take and precisely what it will cost.

Fully Custom Homes

These homes are built one at a time and the buyer has a say in every aspect of the build, up to the last detail. This means they are quite a bit more expensive and can take significantly longer to build. You will also need to consult with other specialists, such as an architect, to be sure your plans are structurally feasible. 

Semi-Custom Homes

Semi-custom homebuilding is a middle ground between production and fully custom homes. You have more say in the layout and appearance of the home, while still having to leave some decisions up to the builder. The cost and timeline of the home may be less finite than with a production home. 

How Do You Buy a New Construction Home?

Homebuilding financing usually comes in the form of a construction loan. These loans can be standalone or converted to a traditional mortgage upon completion of the home. Standalone construction loans are typically short term–designed to be repaid in a year or so. They only finance the building phase, after which the homeowner will need to take out a separate mortgage.

Standalone construction loans are similar to bridge loans: both are short term financing options that are meant to be paid off through conversion to  longer-term loans. However, bridge loans are not typically used to facilitate construction of a new property, but rather the acquisition of an existing one. They may, however, be an option for purchasing land while you await long term financing.

What if You Don’t Qualify for a Construction Loan?

If your dream is to build a new home but you don’t qualify for a traditional bank loan, a hard money loan may be an option. With fast turnaround times and flexible rates, hard money loans are designed to help you beat the competition when it comes to property builds and acquisition. They can close in a matter of days compared to the weeks or even months it can take a construction loan to come through. The interest rates may be higher, however, and the loan is designed to be short term. They are ideal for savvy investors looking to get started on construction quickly. 

In Colorado, the experienced professionals at Pinetree Financial partners have financed projects all over the state for the last thirty years. We understand how important speed is when it comes to certain investment transactions, and we pride ourselves on our swift closing times and tailored strategies. Call or go online today to get started. 

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