Newly built homes accounted for 26.8% of single-family homes for sale nationwide in August, according to a new data report from Redfin. This is down from 28.2% one year ago and 30.6% two years prior, and it also marked the lowest level in four years.
Redfin attributed this decline to the rebounding level of existing homes that are coming on the market after years of homeowners opting not to sell due to their ultra-low mortgage rates. Furthermore, fewer new properties are being constructed as the pandemic-era building boom leveled off – housing starts fell 6% year-over-year in August and housing completions fell 8.4%, as per federal data.
“Builders are hesitant to start new projects because in today’s buyer’s market, it doesn’t make financial sense,” said Jesse Landin, a Redfin Premier agent in San Antonio. “The market is oversaturated with new construction, so much so that some local builders are laying off workers – something I’ve never heard of happening before.”
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It is important to note that Nationally new home sales historically are approximately 10% of home sales annually. New home sales are currently far ABOVE historical volumes! Builders are doing what builders do. They adjust to market conditions.
The premier Redfin agent quoted has only been “ in the business” since 2014. Understandable that he “has never heard of builders reduce their work force”. A multi decade experienced real-estate professional would tell you this is a normal response to market cycles.
There is a housing affordability problem- not a housing shortage. Many factors contribute to high housing prices. Many factors contribute to household income levels (or lack thereof).
Nothing is as simple as a headline would suggest.