As land prices remain high (up 4% to 6%) and new home prices continue to drop (down 1% nationally) many new home construction builders are cutting back their start rates.
New home inventory remains high but, currently, the demand is just not there and sales remain sluggish.
Labor and material costs remain high but it is hoped that falling prices of new construction will bring down land prices in the near future.
New home construction increased in 2024 – up to 1,020,600 single-family homes as compared to 998,900 in 2023. Just as important the median listing price for new homes in December was down 0.7% year over year to $449,967.
Analysts say newly built homes are smaller and more affordable. During the fourth quarter of 2024, new homes accounted for slightly over 18% of all listings. The South and West are currently far ahead of the Northeast and Midwest when it comes to new construction.
Certainly, all the events coming out of Washington DC will have an impact on new construction. Just what that impact will be remains to be seen.