Record High Share of Houses for Sale Are New Construction

As housing demand surges and inventory dwindles, the share of newly built single-family homes for sale in December made up one-third of total housing inventory, up 25.4% year-over-year and the highest share on record, Redfin reports. Builders are heading into 2022 with one overriding goal: to make up for lost time after over a decade of under-building. As buyer demand mounts in the midst of a frenzied post-pandemic market, new construction is vital to easing record high price gains and adding more affordable housing into a tight market.

By the end of December 2021, overall inventory dropped 14.2% year-over-year to a record low 1.8 months of supply, but homebuying isn’t slowing. New home sales rose 11.9% from November to December, and pre-owned homes made up the majority of available supply at the close of 2021. Though builders across the U.S. are facing a slew of supply chain delays and costly shortages, newly built homes will make up a larger share of total housing inventory in 2022 than in the year prior as the housing market stabilizes post-pandemic.

“A lot of pre-owned homes are being listed, but they are just selling off so quickly–typically in a matter of days–while new homes take longer to sell,” said Redfin Economist Sheharyar Bokhari. “So as a homebuyer, you’re increasingly likely to see new builds when you look up homes for sale in your target area. Existing homes tend to be less expensive and fly off the shelves faster, so people who are just getting into the market should speak to their lender and agent about preparing to act quickly when an existing home that meets their criteria does hit the market this winter.”

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