One-Third of Houses for Sale Are New Construction, an All-Time High
The share of newly built single-family homes on the market is at a record high as builders try to keep up with surging homebuyer demand fueled by low mortgage rates, low inventory and remote work
SEATTLE--Monday, January 31, 2022--(BUSINESS WIRE)--(NASDAQ: RDFN) — More than one-third (34.1%) of U.S. single-family homes for sale in December were new construction, up from 25.4% a year earlier and the highest share on record, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage.
Newly built homes have taken up an increasing portion of U.S. housing inventory over the last 10 years, with a major acceleration in mid-2020 after the pandemic began. Homebuilders have been busy trying to make up for the lack of existing homes on the market and keep up with high demand. There has been a surge in homebuyer demand since the start of the pandemic, stemming from low mortgage rates and the prevalence of remote work. At the same time, some homeowners have opted to refinance or remodel instead of selling, intensifying the shortage of existing homes for sale.
Overall inventory dropped to a record low in December. Inventory of existing homes fell 14.2% year over year in December, and there was a record-low 1.8 months of supply. For new homes, there was 6 months of supply and inventory was up 34.8%.
As the share of homes for sale that are newly built has edged up, the share of home sales that are new builds has remained relatively consistent, around 11%. This dichotomy is another indicator that homebuyer demand is far outpacing supply.
“A lot of pre-owned homes are being listed, but they are just selling off so quickly—typically in a matter of days—while new homes take longer to sell,” said Redfin Economist Sheharyar Bokhari. “So as a homebuyer, you’re increasingly likely to see new builds when you look up homes for sale in your target area. Existing homes tend to be less expensive and fly off the shelves faster, so people who are just getting into the market should speak to their lender and agent about preparing to act quickly when an existing home that meets their criteria does hit the market this winter.”
Redfin media release continued in the We Get Around Network Forum (www.WGANForum.com) here: