For real estate investors who specialize in buying and rehabilitating distressed properties, some news came out today that suggests existing home prices for buyers will be more attractive compared to new home purchases. The Commerce Department reported that new home sales fell more new home prices up againthan expected in the month of December to a seasonally adjusted rate of 414,000 units, a drop of 7.00 percent from the previous month.

New home permits have been up over the past year but apparently not in time to build new homes to meet the demand. There’s simply not enough inventory.

It’s possible the lag in new home purchases was due to a combination of both the abnormally cold weather but the number of new homes registered as sold back in October 2013, a near 15 percent increase from the previous month. New home prices reflected the low inventory of homes, a five month supply, as the median new home price hit $265,800 in 2013, the highest price since records began. Meanwhile, the median home price for existing homes was much lower, at $198,000.

The lower prices of existing homes should draw more qualified buyers and competes in an area where new home buyers simply don’t tread. Real estate investors can buy and rehabilitate existing properties to meet current demand as well as be more affordable to more potential buyers. This along with the fact that it’s still more challenging to obtain a home loan compared to a few years ago. And while the unemployment rate has fallen there are fewer people in the work force drawing pay checks. That points to a continued demand for rental housing while consumers get back on their financial foothold and be able to save money for a down payment and closing costs and get their credit profile back in shape if needed.