SEATTLE, Sept. 25, 2020 /PRNewswire/ -- (NASDAQ: RDFN) —
New listings of newly-built homes dropped 4.1% year over year to a
seasonally-adjusted rate of 74,000 in August, reversing course
after a 3.8% gain in July, according to a new report from Redfin
(www.redfin.com). Meanwhile, new listings of existing homes grew
5.2%.
"There's plenty of demand for new homes, but builders are facing
a unique and costly set of hurdles as they attempt to satisfy that
demand," said Redfin chief economist Daryl
Fairweather. "Listings of new homes aren't bouncing back as
quickly as listings of existing homes because, unlike individual
homeowners, construction companies have to deal with lumber and
labor shortages during the pandemic. They're also competing for
labor and materials with folks who are renovating their houses
during quarantine. The lack of new listings is keeping builders
from reaching their full potential in terms of home-sales
growth."
Sales of newly-built homes were up 8.3% year over year to
73,000, a deceleration from July's 13.5% increase, while sales of
existing homes rose 10.5%—outpacing new-home sales growth for the
first time since 2015.
The supply of newly-built homes for sale sank 33.6% year over
year in August to 185,000, while the number of existing homes on
the market plunged 38.3%—the largest declines since at least
2013.
The acute dearth of homes for sale, paired with strong homebuyer
demand due to record-low mortgage rates, is driving up prices.
Newly-built homes sold for a median of $378,000 in August. That's 4.1% higher than a
year earlier, exceeding the pre-coronavirus (February) growth rate
for the first time. Meanwhile, existing home prices rose 12.1% to a
median of $316,000. Existing homes
are typically more affordable, and consequently more desirable for
many Americans, explaining the relatively high price growth.
"Prices will keep going up if we don't see a meaningful increase
in the supply of new homes on the market," Fairweather said.
"Unfortunately, there are no signs that such an increase will occur
anytime soon."
Homebuilding activity slumped in August, the U.S. government
reported last week. The number of housing starts dropped 5.1%
from the prior month, while housing completions slipped 7.5% and
building permits fell nearly a percent—intensifying the existing
housing shortage.
Homebuilders seem to be optimistic about the future; builder
confidence rose to an all-time high this month as record-low
interest rates and a shift to the suburbs during the pandemic
fueled homebuyer demand, according to the National Association of
Home Builders. Still, the NAHB flagged several concerns, noting
that lumber prices have skyrocketed more than 170% since mid-April,
adding more than $16,000 to the price
of a typical new single-family home.
"Historic traffic numbers have builders seeing positive market
conditions, but many in the industry are worried about rising costs
and delays for building materials, especially lumber," said NAHB
Chairman Chuck Fowke. "More domestic
lumber production or tariff relief is needed to avoid a slowdown in
the market in the coming months."
To read the full report, including charts, please visit:
https://www.redfin.com/blog/new-home-construction-august.
About Redfin
Redfin (www.redfin.com) is a
technology-powered residential real estate company, redefining real
estate in the consumer's favor in a commission-driven industry. We
do this by integrating every step of the home buying and selling
process and pairing our own agents with our own technology,
creating a service that is faster, better and costs less. We offer
brokerage, iBuying, mortgage, and title services, and we also run
the country's #1 real estate brokerage search site, offering a host
of online tools to consumers, including the Redfin Estimate. We
represent people buying and selling homes in over 90 markets in
the United States and Canada. Since our launch in 2006, we have
saved our customers over $800 million
and we've helped them buy or sell more than 235,000 homes worth
more than $115 billion.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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SOURCE Redfin