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One-Third of Houses For Sale Are Newly Built, Just Shy of the Record High

Written by Posted On Tuesday, 21 May 2024 06:24
One-Third of Houses For Sale Are Newly Built, Just Shy of the Record High

Redfin reports the share of houses for sale that are brand new is hovering at a level that’s nearly double the pre-pandemic rate

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. That is according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

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, FL. “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.

To view the full report, including a chart, please visit: https://www.redfin.com/news/new-construction-homes-one-third-of-inventory-2024

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Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent. You can find more information about Redfin and get the latest housing market data and research at Redfin.com/news. For more information about Rocket Companies, visit RocketCompanies.com.

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