If you’re in the process of looking for a home today, you know the supply of homes for sale is low because you’re feeling the impact of having a limited pool of options. And, if your biggest hurdle right now is that you’re having trouble finding something you like, don’t forget that a newly built home is a great option.
As a recent article from the National Association of Realtors (NAR) says:
“Home buyers continue to be met with limited housing options during what’s typically the real estate market’s busiest season. . . . The current supply of existing homes is about half the level it was in 2019 . . . Meanwhile, the market for new construction is a bright spot.”
Here’s a look at a key metric that shows just how much new home construction is ramping up nationwide. It’s called new residential completions. Basically, completions are newly built homes that are finished and ready to move into.
The graph below uses data from the Census to show the trend of new-home completions over time, including the long-term average for the number of finished housing units.
As you can see on the left (shown in orange), leading up to the housing crash, builders exceeded that average. The result was an oversupply of homes on the market, so home values declined. That was one of the factors that led to the housing crash back in 2008.
Since then, the level of new home construction has fallen off, and builders haven’t built enough homes to meet the historical average (shown in red). That underbuilding left the housing market with a multi-year inventory deficit. And, that deficit is part of what makes inventory so low right now.
But, here’s the good news. The green on the right shows that according to the latest report from the Census, builders are matching the long-term average right now. That means they’re bringing more newly built homes to the market than they have in recent memory.
Residential starts and permits are also gaining momentum. Starts are homes where the construction has officially kicked off. Permits are homes where builders are planning to break ground soon. Since both are up, it’s a sign there are even more newly built homes coming soon.
What does this mean for you as a buyer?
More newly built homes in various stages of the construction process means your pool of options just got bigger. If you’re looking to move right now and timing is important to you, Stafford Family Realtors can help guide you through the process and explore all the completed new construction and options available to you. If construction is done on those homes, you should be able to move in quickly.
But, if you can wait a bit and the idea of customizing a home from the ground up appeals to you, we can help with that too. If you’re considering a home that is under construction, you may even be able to make selection and personalize the home to meet your style. This is a great option when you haven’t quite found the right home that meets your needs, being able to tailor one to your taste may be the best fit.
Either way, a trusted agent is a crucial part of the process. Stafford Family Realtors are well versed in working with builders and new construction and can help you to craft your perfect home while protecting your investment.
So, if you're having trouble finding a home you like while inventory is low, it may be time to consider looking into new-home construction. Reach out to Eric and Sharla Stafford to start the conversation and see how you can put our local expertise and experience to work for you!