Amidst a persistent shortage of homes in the resale market, an increasing number of home buyers are turning to new construction, resulting in a notable increase in new construction starts over the past several years. This isn’t unexpected, as CEO Kevin Woeste, PS, PLS, LS, shared with the team at their company meeting earlier this spring.
At that time, he noted, “As for construction, it remains strong and we are confident that it will remain so over the next few years.” He went on to say, “Consider that the United States needs about 2 million homes and we are on track to build between 1.2 million and 1.5 million. There is a large gap, due primarily to the fact that there are not enough builders, tradespeople, and supplies.”
Below, we review what industry experts are saying about the current real estate market and the impact of new construction, and here’s what we found.
The Impact of New Construction on the Current Real Estate Market
New Home Sales Rise as Buyers Run Out of Options in the Resale Market
An ongoing and persistent lack of homes in the resale market is pushing more home buyers into new construction, which caused sales to surge for the second month in a row. Overall, new home sales are trending higher as buyers grapple with a low level of home listings in the existing home sales market.
“This spring, new home sales are a more important part of the market than they would be in a more typical year,” according to Lisa Sturtevant, chief economist at Bright MLS. While sales of new single-family homes typically form less than 10% of national home sales, this April, the share increased to about 14%, she added.
National, local leaders unite to kick off mega construction projects in Ohio
In the next few years, there will be nearly $200 billion worth of projects happening in Ohio that are expected to have a multigenerational impact—not just on the state, but on the country. Leaders at an event held at the Local Union 189 Thursday called Columbus America’s “opportunity city,” and said Ohio is becoming the nation’s capital for upwards mobility.
‘Locked in’ mortgage rates mean few homes on market. How new construction has been a solution.
As homebuyers continue to be frustrated this spring with the limited inventory of existing homes, at least one segment of the housing market is seeing a silver lining: new home builders.
Builder confidence in the market for newly built single-family homes in May rose five points to 50, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This marks the fifth straight month that builder confidence has increased and is the first time that sentiment levels have reached the midpoint mark of 50 since July 2022.
