Homebuilders Aren’t Overbuilding, They’re Catching Up

Why More New Homes on the Market Is Good News

Lately, you may have noticed that there are more brand-new homes available than usual. In fact, about one in three homes on the market today are newly built. This might make you wonder what this means for the housing market and your own home buying journey. Let me break it down for you.

This Isn't 2008 All Over Again

Many people remember the 2008 housing market crash and worry when they see an increase in new home construction. Back then, one of the issues was an oversupply of homes. However, the current situation is very different.

After the 2008 crash, there was a long period where not enough homes were built. This underbuilding left a significant gap in housing supply. Recently, builders have been ramping up construction to catch up with the demand, not to flood the market with excess homes. Even with the recent increase in new builds, we're still just meeting the long-term average for housing construction.

Builders Are Being Cautious

Recent data from the Census on housing starts (homes where builders have just broken ground) and permits (homes where builders can start soon) shows that builders are slowing down their pace. They’re responding to high mortgage rates and how those rates are affecting buyer demand. Essentially, builders are being cautious and not overbuilding. They remember the consequences of overbuilding from the 2008 crash and are taking steps to avoid repeating that mistake.

More Options for Homebuyers Now

If you're in the market for a new home, this is actually good news for you. With the current level of new home construction, you have more options to choose from now than you might later in the year. Builders are slowing down on new projects, so the peak of new home availability might be right now.

According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), the decline in housing starts means that in about six months, there will be fewer new homes completed and ready for sale. This makes now an excellent time to start your home search if you’re considering a newly built home.

Work with a Trusted Real Estate Agent

Navigating the market for new homes can be tricky, but that’s where I come in. As your real estate agent, I can provide valuable insights into local builder reputations and other key factors. If there isn’t much new construction in your immediate area, I can guide you to nearby locations where new homes are available.

Bottom Line

The increase in new home construction is a positive development for the market. Builders are not overbuilding; they are catching up to the demand. They are also mindful of the market conditions and are adjusting their pace accordingly.

If you’re thinking about buying a new home, now might be the best time to find the most options available. Let’s connect and start your home search today. Together, we can navigate the market and find the perfect new home for you.

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