Lisa Mailhot | July 12, 2023
Buyers
If you're currently searching for a home, you're likely experiencing a limited supply of available properties. The low inventory may be causing frustration as you struggle to find a home that suits your preferences. However, it's important to remember that opting for a newly built home presents a fantastic alternative. According to a recent publication by the National Association of Realtors (NAR):
“Home buyers continue to be met with limited housing options during what’s typically the real estate market’s busiest season. . . . The current supply of existing homes is about half the level it was in 2019 . . . Meanwhile, the market for new construction is a bright spot.”
To illustrate the growth of new home construction across the nation, let's examine a significant indicator called new residential completions. This metric represents newly built homes that have been finished and are ready for occupancy.
The graph below, utilizing data from the Census Bureau, displays the trend of new-home completions over time, including the long-term average for the number of completed housing units:
Looking at the left side of the graph (shown in orange), we observe that leading up to the housing crash, builders exceeded the average completion rate. This resulted in an oversupply of homes, ultimately leading to a decline in home values and the housing market crash of 2008.
Since then, new home construction has declined, and builders have failed to meet the historical average (shown in red). Consequently, the housing market has been grappling with a multi-year inventory deficit, contributing to the current shortage of homes.
However, here's the encouraging news: the green section on the right indicates that builders are now matching the long-term average, as reported by the latest Census data. This implies that they are introducing more newly constructed homes to the market than in recent years.
Additionally, residential starts and permits are gaining momentum. Starts refer to homes where construction has officially commenced, while permits are for homes where builders are planning to begin construction soon. The increase in both categories indicates a forthcoming influx of newly built homes.
The expanding number of newly constructed homes at various stages of completion means that your pool of options has just grown larger. If you're looking to move promptly and timing is crucial, reach out to a local real estate professional who can guide you toward recently completed homes in your area. If construction is complete, you should be able to move in quickly.
Alternatively, if you have the flexibility to wait and the idea of customizing a home appeals to you, consult the same agent about homes under construction in your area. By purchasing a home in progress, you can have a say in selecting features and finishes along the way. This personalized touch may be the best option when none of the existing homes meet your preferences.
Regardless of your approach, enlisting the services of a trusted real estate agent is vital. They possess knowledge of what's available in your area and can make recommendations based on your specific needs, desired neighborhoods, and more.
If you're struggling to find a home you like due to the limited inventory, it may be worthwhile to explore the option of new home construction. To initiate this conversation and ensure you work with an expert who knows what's available in your area, let's connect.
Mortgage loan applications surged 11% in late April/early May, largely driven by experienced buyers trading up to larger homes as mortgage rates briefly declined. With… Read more
Childcare costs are skyrocketing across the U.S., surpassing rent in most major metros. In cities like Denver and Seattle, families with two kids are paying over 160% … Read more
California home sales have dropped below Great Recession levels, while inventory has surged more than 50% in the past year. As buyers retreat due to affordability issu… Read more
Multifamily building permits have plunged over 27% from their pandemic peak, signaling a major slowdown in new apartment construction. Learn how interest rates, tariff… Read more
Despite a turbulent start to the spring buying season, market experts see reasons for optimism—especially in the new-home sector. With mortgage rates fluctuating, tari… Read more
The 2025 spring housing market is seeing stalled momentum, with homebuyers backing off amid economic uncertainty and soaring mortgage payments. With home prices and in… Read more
In today's shifting housing market, sellers are asking nearly $39,000 more than buyers are willing to pay—the widest gap since 2020. Learn what’s driving the divide be… Read more
Home prices in the U.S. continue to climb, but the pace is slowing. February’s 3.9% annual increase signals a shift toward more sustainable growth, according to the FH… Read more
Divorce listings come with unique emotional and logistical challenges. Discover how the right real estate professional can help divorcing couples transition smoothly, … Read more
Let's find a time that suits you best to chat about your goals, show you how we work, and figure out how we can help you the most