32% of Homes for Sale in the Fourth Quarter Were Newly Built—Just Shy of the Record High
February 01 2024 - 9:00AM
Business Wire
Redfin reports new construction has taken up a
growing share of the for-sale housing pie because homebuilding has
increased and the number of individual homeowners selling has
decreased
(NASDAQ: RDFN) — Nationwide, 31.8% of U.S. single-family homes
for sale in the fourth quarter were new construction, according to
a new report from Redfin (redfin.com), the technology-powered real
estate brokerage. That’s comparable with 31.9% a year earlier,
which is the highest level of any fourth quarter on record.
Newly built homes are taking up a growing share of the for-sale
housing pie for two primary reasons:
- Homebuilding has increased. Homebuilding has been on an
upward trajectory since 2009 as builders have slowly climbed their
way out of the hole caused by the Great Recession. Construction
also jumped during the pandemic as builders responded to surging
homebuyer demand fueled by record-low mortgage rates.
- The number of homeowners putting their houses on the market
has decreased over the last year and a half. That’s because
mortgage rates started rising in 2022 and jumped to a 23-year high
in 2023, prompting many homeowners to stay put instead of selling
and losing the rock-bottom rate they scored during the pandemic.
While mortgage rates have fallen a bit in the last few months, this
“lock-in effect” continues to hamper listings, which are higher
than they were a year ago but remain far below pre-pandemic
levels.
Homebuilders have been offering sizable concessions, including
money for mortgage rate buydowns, to attract bidders and offload
inventory. That has made it hard for some individual sellers of
existing homes to compete for buyers.
“Newly built homes are selling quickly right now because
builders are offering such good discounts,” said Heather
Mahmood-Corley, a Redfin Premier real estate agent in Phoenix. “I
recently had a buyer who wasn’t interested in a new construction
home, but the builder offered such a good rate–5.25%–that they
couldn’t afford not to take it. Another one of my buyers got a
$10,000 credit for closing costs from a builder.”
While builders are offering discounts, they’ve also boosted
prices, according to Christine Kooiker, a Redfin Premier real
estate agent in Grand Rapids, MI.
“One of the builders in Grand Rapids that focuses on entry-level
homes now has prices in the mid $300,000 range,” Kooiker said. “Not
long ago, buyers could get a new construction home here for
$250,000 or $300,000.”
Roughly two of every five (42%) new single-family homes that
sold in 2022 went for $500,000 or more, up from under one-third
(30%) in 2021 and 18% in 2020.
To view the full report, including a chart, please visit:
https://www.redfin.com/news/new-construction-q4-2023
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We
also run the country's #1 real estate brokerage site. Our
home-buying customers see homes first with same day tours, and our
lending and title services help them close quickly. Customers
selling a home in certain markets can have our renovations crew fix
up their home to sell for top dollar. Our rentals business empowers
millions nationwide to find apartments and houses for rent.
Customers who buy and sell with Redfin pay a 1% listing fee,
subject to minimums, less than half of what brokerages commonly
charge. Since launching in 2006, we've saved customers more than
$1.5 billion in commissions. We serve more than 100 markets across
the U.S. and Canada and employ over 4,000 people.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240201758248/en/
Redfin Journalist Services: Ally Braun, 206-588-6863
press@redfin.com
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