When it comes to houses for sale, “new” options are gaining ground on “used” ones, real estate sales data shows.
The chart below illustrates the percentage of single-family houses on the market that are newly built, according to data from real estate firm Redfin. New construction made up 25.7% of all such homes for sale in the first quarter of 2021, compared with 20.4% in the first quarter of 2020 and 13.3% back in 1999.
Buyers in recent months, frustrated by a lack of existing homes for sale, have been turning to homebuilders to meet their needs, as low mortgage rates have made borrowing money to buy a house an enticing proposition.
“Building homes has become more attractive and profitable during the pandemic due to record-low mortgage rates and red-hot homebuyer demand,” said Redfin lead economist Taylor Marr in a commentary. “At the same time, many homeowners have opted to stay put and refinance or remodel their existing homes instead of selling them, allowing new-construction homes to take up a larger portion of the market.”