Newly built homes accounted for 28% of single-family homes for sale during the third quarter, according to new data from Redfin (NASDAQ: RDFN). This is down from 30.5% one year earlier and the lowest share in three years.
The record high for newly built single-family homes for sale was 34.4% set the start of 2022. Redfin noted that despite the new low in the third quarter, the total supply of existing single-family inventory is up 22% year-over-year.
“Newly built homes have made up an outsized portion of homes for sale in the last four years because the supply of new-construction homes soared in 2022 and 2023, while the supply of existing homes dwindled,” said Redfin’s data report. “Inventory of existing homes fell over that period as mortgage rates rose and the lock-in effect took hold. The surge in newly built homes, meanwhile, was caused by builders responding to robust homebuying demand brought on by ultra-low mortgage rates and remote work. While building has since slowed, builders are still completing projects they started in the past few years.”
Redfin added the share of newly built homes may continue to decline but will remain above pre-pandemic levels due to elevated mortgage rates that will keep the supply of existing homes from expanding.
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