"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
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
"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
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
"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
To read the full report, including charts, please visit: https://www.redfin.com/blog/new-home-construction-august.
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