With high mortgage rates keeping many homeowners from selling these days, homebuyers are finding their place in new construction.
One-third (33.4%) of single-family homes for sale in the U.S. in the first quarter of 2024 were newly built, according to a new report from Redin. That share is essentially unchanged from Q1 2023 but down from a record-high 34.5% two years earlier.
The pandemic homebuying boom sent builders into overdrive, and as a result, the portion of the housing supply that’s newly built is now roughly double pre-pandemic levels.
Meanwhile, the supply of existing homes for sale has dropped. Mortgage rates hit a two-decade high last year and remain elevated, so many would-be sellers have opted to hang onto their low rate instead of moving and taking on a higher rate.
“We have a fair amount of new-construction homes for sale, and thank goodness we do,” said Nicole Dege, a Redfin Premier agent in Orlando, Fla. “Buyers are having a hard time finding single-family homes in their budget because not many homeowners are letting go of their houses, and those who are listing tend to price high because they haven’t come to terms with the fact that prices have come down from their 2022 peak. Builders have a better understanding of the current market, so they’re pricing fairly, offering mortgage-rate buydowns and providing other concessions to attract buyers.”
The share of for-sale supply that’s newly built has declined slightly from its 2022 peak because total inventory has crept up from last year’s historic lows, as more homeowners list their existing homes. In March there were 8.3 months of newly built homes on the market, compared to 3.2 months of supply for existing homes.
