Despite builders working to increase the number of newly built homes for sale, the share of new-construction homes on the market, as a portion of total housing inventory nationwide, dropped to 28% in Q3 2024. According to housing market platform Redfin, this is the lowest in three years, down from a 34.4% peak in early 2022.
This decline is due to several factors. For instance, there are more existing homes available as some homeowners, tired of waiting for mortgage rates to fall, are moving ahead with listing their homes. Additionally, homebuyers are buying up a lot of the available new homes for sale. Because of current builder incentives, demand for new homes remains strong, with sales rising 6.3% year-over-year.
Still, newly built homes make up a significantly higher portion of for-sale inventory than before the pandemic. That's because the share shot up so much during the pandemic, going from roughly 17% in 2019 to nearly 30% by the end of 2021.
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.
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