Redfin reports homebuyers are turning to newly built single-family homes as overall inventory sits at an all-time low
Newly built homes made up nearly one-third (31.4%) of single-family homes on the market nationwide in the second quarter, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s the highest share of any second quarter on record, with new construction keeping the housing market afloat amid the severe shortage of existing homes for sale.
The portion of new homes of all inventory is up from 30.3% a year earlier and nearly double the pre-pandemic share of about 17% in the second quarter of 2019.
The second quarter’s share is down from a near-record-high of 33.6% the previous quarter, but that’s a normal seasonal pattern, as the share of new homes tends to peak in the winter months.
New homes make up a near-record share of housing inventory for a few reasons:
Homebuilders are benefiting from the scarcity of existing homes on the market
With inventory at a record low, many buyers are turning to new construction. But because overall demand is still relatively low, with high rates continuing to sideline many would-be homebuyers, some builders are lowering prices and offering perks to offload excess inventory.
For many homebuyers, new construction is a welcome option in today’s market–especially in the southern part of the country, where new homes tend to be more prevalent. That’s partly because new homes are often easier to find and partly because builders are more likely than individual homeowners to offer concessions; builders typically don’t have the option of pulling a home off the market if they’re unable to get the price they want.
“Builders are still building but homeowners aren’t selling, so new construction is the only option for many buyers,” said Shauna Pendleton, a Redfin Premier agent in Boise, ID, where new homes made up nearly 40% of single-family inventory in the second quarter. “A lot of buyers want to secure a home now because they’re worried prices are going to go back up, and new construction is more plentiful with perks that are hard to pass up. One builder is doing a promotion where buyers get anywhere from $15,000 to $25,000 worth of concessions. It was supposed to end in June, but they extended it through July, and now they’re extending it through August. That money can cover all of a buyer’s appliances with money left over for a mortgage-rate buydown.”
Metro-level highlights: Q2 2023
To view the full report, including charts and additional metro-level data, please visit: https://www.redfin.com/news/new-construction-homes-one-third-of-inventory
Owning a home has long been considered the quintessential American dream, but the path to those white picket fences is far from smooth. Although 84% of Americans say they’d like to own a home one day, 51% who don’t own today worry they’ll never get there.
We asked 2,000 U.S. consumers about their homeownership dreams, fears and challenges — here’s what we found.
You can check out our full report here: https://www.lendingtree.com/home/mortgage/homeownership-dreams-survey/
LendingTree's Senior Economist, Jacob Channel, had this to say:
"There’s no getting around how tough buying a home can be in today’s high-interest rates and high-price housing market. As tough as it may seem, those who want to buy but can’t afford to right now should try to keep hope. The more time you give yourself to do things like save for a down payment and work on your credit score, the more likely you’ll be able to buy one day.”
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