After a tumultuous start to spring, the decline of newly built homes is stalling. In the smallest decrease of 2020 so far, the number of newly built homes fell 10.5 percent, according to Redfin. One out of every five homes in the nation was a newly built home in April, up from one out of six homes the year before. In addition to the slowing pace of inventory decline, the increasing share of newly built homes is also due to the shrinking number of existing homes on the market. In April, the supply of existing homes fell 24 percent as homeowners delayed their moves and delisted their properties. However, the increasing share may be short lived as construction permits and activity are down, and the real estate market is starting to thaw, which may entice sellers back.
The number of newly built homes on the market fell just 10.5% year over year in April, the smallest decline in 2020 to date, while the supply of existing homes plunged 24%.
With the supply of existing homes sinking, new properties now make up a bigger piece of the pie. Last month, 1 in 5 homes on the market was a newly built home. That’s up from closer to 1 in 6 last year and represents the largest share since at least 2012.
The inventory of existing homes has plummeted amid economic uncertainty and health concerns fueled by the coronavirus pandemic, with an increasing number of Americans choosing to delist their homes or not even put them up for sale in the first place. Meanwhile, the supply of new-construction homes has seen a relatively small drop, as builders and homeowners approach home selling differently.