{"id":70045,"date":"2020-08-25T05:00:23","date_gmt":"2020-08-25T12:00:23","guid":{"rendered":"https:\/\/www.redfin.com\/blog\/?p=70045"},"modified":"2020-10-07T17:33:26","modified_gmt":"2020-10-08T00:33:26","slug":"new-home-construction-july","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/new-home-construction-july\/","title":{"rendered":"Sales of New-Construction Homes Rebound to Pre-Coronavirus Levels, Rising 10% in July"},"content":{"rendered":"

A surge in homebuilding before the pandemic is now driving growth in new-home sales. A shift to the suburbs and record-low mortgage rates are also contributing factors.<\/span><\/i><\/h2>\n

Sales of newly-built homes climbed 10.1% year over year in July, recovering to pre-pandemic levels, while sales of existing homes rose just 5.3%.<\/span><\/p>\n

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Meanwhile, the supply of new-construction homes for sale slid 28.4%, representing the largest drop since at least 2013, when Redfin began recording this data. Still, that wasn\u2019t as severe as the record 37% decline in the inventory of existing homes last month. The relatively acute shortage of existing homes means that <\/span>newly-built homes now make up one of every five houses for sale\u2014the <\/span>largest<\/span><\/a> share on record.<\/span><\/p>\n

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\u201cThe shortage of both new and existing homes is intensifying across America right now as record-low mortgage rates drive more demand, but the shortage of new homes is less severe due to a <\/span>surge<\/span><\/a> in construction right before the pandemic,\u201d said Redfin senior economist <\/span>Sheharyar Bokhari<\/span><\/a>. \u201c<\/span>As a result, sales of new homes are growing faster than sales of existing homes. Sales of new homes are also on the rise because the coronavirus pandemic is fueling <\/span>interest<\/span><\/a> in the suburbs\u2014where there tends to be more space to build new homes.\u201d<\/span><\/p>\n

The number of newly-built homes on the market may continue to grow; residential construction projects in the U.S. surged <\/span>23.4% year over year in July, and <\/span>building permits jumped <\/span>9.4%<\/span><\/a> to a seasonally adjusted annual rate of 1.495 million, <\/span>surpassing<\/span><\/a> pre-pandemic levels. Still, uncertainty remains as homebuilders are now facing a lumber shortage that could hamper construction. Lumber prices are up more than 100% since mid-April amid <\/span>reduced<\/span><\/a> production at mills due to the pandemic and higher tariffs on imports of lumber.<\/span><\/p>\n

New listings of newly-built homes increased 1.8% year over year in July, while new listings of existing homes rose 2.9%, likely reflecting pent-up supply as many homeowners who had postponed selling during stay-at-home orders are now listing their homes.<\/span><\/p>\n

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Prices of newly-built homes grew just 2.3% in July to a median of $375,000, while prices of existing homes <\/span>jumped<\/span><\/a> 9.3% to $308,000.<\/span> Existing homes are typically more affordable, and consequently more desirable for many Americans, explaining the relatively high price growth.<\/span><\/p>\n

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\u201cAll of the suburbs around <\/span>Oklahoma City<\/span><\/a> are exploding with new construction\u2014there are 50 homes being built within a two-mile radius of where I live,\u201d said local Redfin agent <\/span>Jeni White<\/span><\/a>. \u201cThe only thing that has slowed down is the access to certain building supplies; one of my buyers didn\u2019t get a smart-home gadget that was supposed to come with the home until two weeks after closing because it was stuck on a boat from China. Another buyer had to pick out a different type of granite for their house because of Chinese tariffs.\u201d<\/span><\/p>\n

More New-Construction Highlights in July:<\/span><\/h2>\n