As more homeowners cling to properties with ultra-low mortgage rates, newly built homes are making up a larger percentage of properties for sale.
Newly built homes accounted for 31.4% of all U.S. single-family homes on the market in the second quarter, according to a new analysis from the real estate web site Redfin.
Prior to the pandemic, in the second quarter of 2019, just 17% of homes for sale were newly built.
The increased inventory of new homes is the result of a pandemic-induced home-building boom as builders took advantage of a home-buying craze fueled by remote work and low mortgage rates.
Now that mortgage rates have topped 7% and are at a two-decade peak, the housing market has slowed, creating a glut of new construction over the past few months. The number of newly built single-family homes on the market was up 4.5% in June compared with a year earlier, whereas the number of existing homes for sale fell 18%.
“Builders are still building but homeowners aren’t selling, so new construction is the only option for many buyers,” Redfin agent Shauna Pendleton said in a statement. “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.”
Builders of new homes, Redfin said, are providing concessions such as mortgage-rate buydowns to entice sales because they don’t have the option of not selling.
El Paso, Texas, had the largest share of newly built single-family homes on the market in the second quarter at 52%. Omaha, Neb. (46%), Raleigh, N.C. (42.1%), Oklahoma City, Okla. (39%) and Boise, Idaho (38%) rounded out the top five. Redfin noted that new construction is more available in areas of the country that have a lot of sprawling land and less restrictive building codes.
Honolulu, Hawaii, had the fewest newly constructed homes on the market at 2.8%. San Diego (3.3%), Pittsburgh, Penn. (3.3%), Oxnard, Calif. (3.7%) and Detroit, Mich. (3.8%) rounded out the top five. (Redfin said new construction is less likely to be found in California because there is limited land and stricter regulations.)
