News & Media
SEATTLE— One-third (33.4%) of single-family homes for sale in the U.S. in the first quarter were newly built, essentially unchanged from a year earlier but down from a record-high 34.5% two years earlier, according to a new report from the real estate brokerage Redfin,
The portion of housing supply that’s newly built is still roughly double pre-pandemic levels.
Newly built homes have taken up an outsized portion of inventory since the pandemic homebuying boom sent builders into overdrive. There are two main reasons for that:
Homebuilding has shot up. Construction of U.S. homes soared at the start of the pandemic, with builders responding to sky-high homebuying demand brought on by remote work and rock-bottom mortgage rates, and single-family housing starts are still sitting at significantly higher levels than pre-2020.
The supply of existing homes for sale has dropped. Homeowners are staying put because mortgage rates hit a two-decade high last year, and they’re still elevated far above pre-pandemic and pandemic levels. Many would-be sellers are opting to hang onto their low rate instead of moving and taking on a new one.
“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. “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. At the same time, builders have eased up slightly on housing starts due to high mortgage rates and dampened demand. Many of them are still trying to offload the glut of homes they started developing in 2021 and 2022: For new-construction homes, there were 8.3 months of supply on the market nationwide in March, compared to 3.2 months for existing homes.
Source: Redfin
Copyright Business Wire 2024
