By Paul Bergeron
Homebuilders will take on fewer new projects next year as they focus on getting their existing projects sold, according to a new report from real estate brokerage Redfin.
Twenty-nine percent of U.S. single-family homes for sale in the third quarter were new construction—the highest share of any third quarter on record, according to Redfin.
That a good tick higher than the 25% in Q3 2021 and 18% in Q3 2020.
Kurt Carlton, President and Co-Founder at New Western, tells GlobeSt.com, “With the average existing mortgage below 5% today, homeowners are only selling into this rate environment if they absolutely have to, while builders on the other hand, don’t have the luxury of waiting it out. As a result, we are seeing new construction inventory grow as a percentage of all sales while existing home sales diminish.”
New Construction Always Lags the Broader Market
Chad Gallagher, Co-Founder and Chief Growth Officer, Home365, tells GlobeSt.com that two things are at play.
“First, new construction will always lag the broader market,” Gallagher said. “So, when there is a slow-down in overall sales, new construction will take up a larger share of the marketplace because the new construction sales can’t be slowed down as quickly.
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