What Impact Does New-Home Construction Have on the US Housing Market?
Prices for new-build homes are increasing overall, but not in every local housing market
Aug. 6, 2024
Image: ungvar / stock.adobe.com
Markets across the country have seen an influx of new-home construction, which is affecting pricing in some locales.
With an ongoing housing shortage, markets across the U.S. have seen an influx of new-home construction. In a recent report, housing market data tracker Parcl Labs analyzed 20 high-growth U.S. housing markets to understand what impact new construction has on supply-demand dynamics as well as on pricing. As of June 2024, Boise, Idaho, experienced the most significant housing stock increase at 33.3% of the total market share, followed by Austin, Texas, at 21.6%. In comparison, the U.S. average for new builds is about 10% of listings. However, when determining the impact of new construction on housing prices the report shows trends are highly dependent on the specific market.
Prices reveal market-specific trends unfolding: While U.S. new construction prices rose 3.78% year-over-year, Austin bucked the trend with declines across sales (-0.25%), listings (-2.52%), and rentals (-1.60%). Meanwhile, Boise defies expectations: Despite supply-demand imbalances, it maintains strong sales price growth at 8.25%, raising questions about market sustainability.
