Newly Constructed Houses Make Up One-Third of All U.S. Homes Sales in December

According to a report released today (1-31-22) by Redfin, the Seattle-based, technology-powered real estate brokerage, more than one-third (34.1%) of U.S. single-family home sales in December were for new construction. This is the highest share on record and 8.7% above December 2020 reading of 25.4%.

Newly built homes have taken up an increasing portion of U.S. housing inventory over the last 10 years, with a major acceleration in mid-2020 after the pandemic began. Homebuilders have been busy trying to make up for the lack of existing homes on the market and keep up with high demand. There has been a surge in homebuyer demand since the start of the pandemic, stemming from low mortgage rates and the prevalence of remote work. At the same time, some homeowners have opted to refinance or remodel instead of selling, intensifying the shortage of existing homes for sale.

Overall inventory dropped to a record low in December. Inventory of existing homes fell -14.2% year over year in December, and there was a record-low 1.8 months of supply. For new homes, there was a 6-month supply and inventory was up 34.8%.

In a statement prepared to accompany the report’s release, Sheharyar Bokhari, a Redfin Economist said, “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. 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.”