Currently Reading

Fewer Buyers Are Looking for New Construction as Prices for Building Materials Rise

Advertisement
New-Construction Projects

Fewer Buyers Are Looking for New Construction as Prices for Building Materials Rise

Inflated prices for building materials are pushing new home construction out of reach for budget-conscious buyers


April 21, 2022
Framed house construction
Image: Stock.adobe.com

Homebuyers backed by low mortgage rates set their standards high and searched predominantly for newly constructed homes in 2020, but just two years later, rising prices for building materials and elevated home prices are chipping away at mid-pandemic preferences. After falling for five straight quarters, the share of prospective buyers searching for new construction is back to pre-pandemic levels at just 19%, a significant drop from 42% of house hunters in 2020, NAHB Eye on Housing reports.

A 31% increase in the cost of building materials is pushing new construction further out of buyers’ budgets, particularly as rising inflation for everyday commodities threatens affordability on nearly every front. 

By the fourth quarter of 2020, 42% of prospective buyers preferred new construction.  Since then, however, rising new home prices (driven by a 31% increase in the cost of building materials) have eroded the preference for new homes.

New construction has lost preference in every region of the country.  From peak to now, the share of buyers who’d prefer a newly-built home dropped in the Northeast (60% to 19%), Midwest (27% to 14%), South (33% to 21%), and West (51% to 24%).

Read more

Related Stories

Builders

Homebuilders Keep a Steady Pace as the Market Cools

As mortgage rates quell heated competition and elevated buyer demand for existing homes, builders are finding ways to offer affordability to a more budget-conscious consumer base

Environmental

Builders Race to Future-Proof New Residential Development Against Climate Change

New residential projects are employing resilient building techniques to withstand the intensifying effects of climate change in the decades to come

New-Construction Projects

Housing Completions Expected to Boost Supply in 2022

The housing market may be slowing down, but new construction projects are keeping a steady pace, experts say

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.