Houston’s percentage of newly built homes for sale highest in the nation

by Patrick Regan

Nearly 40% of homes for sale in the Houston market during the fourth quarter of 2021 were new construction, the highest percentage of any market in the country, a new Redfin report found.

Houston led the way in what was a record 34.1% of U.S. single-family homes for sale in December 2021 that were newly built. That’s an increase from 25.4% the year before and the highest percentage in the data going back to the 1990s, according to a Redfin news release.

In Houston, 39.5% of for-sale homes were new construction in the fourth quarter, the largest percentage of the 50 metro areas in Redfin’s analysis, the news release said. Second on the list was Minneapolis (38.3%) and third was San Antonio (37.5%).

Over the last 20 years, the percentage of new construction homes for sale has hovered around 15%. That number dipped under 10% during the Great Recession and has been climbing significantly in the last three years, Redfin reported.

New construction has picked up since mid-2020, trying to meet the demand for housing that increased during the pandemic due to low interest rates and the switch by much of the workforce to remote jobs.

“A lot of pre-owned homes are being listed, but they are just selling off so quickly — typically in a matter of days — while new homes take longer to sell,” Redfin Economist Sheharyar Bokhari said in the news release. “So as a homebuyer, you’re increasingly likely to see new builds when you look up homes for sale in your target area. Existing homes tend to be less expensive and fly off the shelves faster.”

Nationwide, the number of building permits was up 6.5% year over year in December. The increase in building permits at the end of 2021 is a signal that the supply of new construction homes will continue to rise in 2022. 

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