Nearly One In Three Homes Listed in the U.S. Are New Builds

Nearly one-third of all single-family homes listed for sale in the U.S. during the first quarter of 2024 were newly built, indicating a market still deeply shaped by the pandemic’s aftereffects.

The persistence of new constructions, making up 33.4% of the market — barely changed from last year but down slightly from the 34.5% peak two years ago — marks a continued trend where many homeowners cling to low mortgage rates rather than enter a market recalibrating from historic highs.

This dynamic has kept the supply of existing homes low, bolstering the presence of newly built properties that now constitute one-third of available housing, according to data issued by Redfin on Monday. 

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The stability of new construction in the housing market contrasts with the fluctuating supply of existing homes, Redfin said. As mortgage rates soared, reaching two-decade highs last year, the reluctance among current homeowners to sell became more pronounced due to the "lock-in" effect.

That hesitation is largely due to the advantageous low mortgage rates locked in during the earlier stages of the pandemic, making the cost of moving to a new home under current conditions less appealing.

"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," Nicole Dege, a Redfin Premier agent in Orlando, said in the report.

Builders, recognizing the market shift, have adjusted their strategies accordingly, Dege said. "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."

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While the rush of housing stats seen at the pandemic’s outset has moderated, construction levels remain elevated compared to pre-pandemic figures, according to census data, ensuring a steady influx of new homes into the market.

In March, the inventory of new constructions was higher than that of existing homes, with 8.3 months of new construction supply available, compared to just 3.2 months for existing homes.

The slight decrease from the record-high percentage of newly built homes in the market two years ago reflects a gradual return of homeowners listing their properties as they adjust to the post-pandemic economic environment.

However, the market remains far from normalized, Redfin noted, with new constructions still representing a larger share of the housing market than before the pandemic.

For now, buyers have a fair portion of new homes to consider, which may offer more competitive pricing and incentives not typically available in the resale market. "We have a fair amount of new-construction homes for sale, and thank goodness we do," Dege said.

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