Share of newly constructed homes on market hits all-time peak
More than one-third of all single-family homes on the market in the United States this December were newly constructed, according to a new report from online brokerage Redfin.
The report found that 34.1 percent of homes on the market in the last month of 2021 were new construction, a year-over-year increase from December 2020, when new builds accounted for just 25.4 percent of houses on the market. December’s figure represents an all-time high.
The increase is a continuation of the trend seen during the past 10 years wherein newly constructed homes have made up a bigger and bigger percentage of the country’s housing stock. The trend has been exacerbated during the pandemic as builders have raced to catch up with the landmark demand for houses driven by low interest rates and remote work being met with historically low inventory, especially of pre-existing homes.
“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 via a press release. “So as a homebuyer, you’re increasingly likely to see new builds when you look up homes for sale in your target area.”
Bokhari advised those looking for a pre-existing home to act fast, because it won’t be available for long.
“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,” she said.
Texas, where homebuyers have flocked over the past two years for its low housing costs, low taxes, and warm temperatures, contained two of the three metro areas with the most newly constructed housing in the fourth quarter of 2021.
The Houston area saw the greatest share of new houses on the market at 39.5 percent, while San Antonio clocked the third highest at 37.5 percent.
Minneapolis, Minnesota had the second-highest share of newly constructed homes on the market, at 38.3 percent.
Meanwhile, three California cities rounded out the bottom, with the least amount of newly constructed homes on the market. San Diego charted the least, with only 3.1 percent of homes newly constructed, while Anaheim only had 3.8 percent, and Los Angeles had 4.4 percent.
The report attributed California’s dearth of new homes to a shortage of vacant land and overly restrictive zoning laws, whereas Houston has no zoning restrictions.
Looking ahead, the report’s authors expected new home inventory to continue to rise based on the number of construction permits, which rose 6.5 percent from the previous year in December, and 9.1 percent from the previous month.