A recent Redfin report indicates the new-homes market is on its way to recovery, but August saw a bit of a bump in the road.
Specifically, after experiencing a significant rebound in sales in July, new listings of newly-built homes dropped 4% (year over year), dipping down to a seasonally-adjusted rate of 74,000 during August.
Sales of newly-built homes experienced an uptick of 8.3% (year over year), with a total of roughly 73,000. However, this was still a decrease from July's impressive 13.5% increase.
Regarding new listings of already existing homes, those grew 5.2%, according to Redfin’s report. As for the sales of existing homes, those rose 10.5%, a rise in percentage that surpassed new-home sales growth for the first time in half a decade (since 2015).
The report revealed what most already knew, that the supply of newly-built homes for sale is shrinking as the pandemic continues to wreak havoc. Specifically, the month of August saw the number of newly-built homes on the market sink 33.6% (year over year), down to 185,000. The number of existing homes on the market also took a dive, plummeting 38.3%, which marks the biggest dip in more than seven years (since 2013).
Experts point to numerous factors as contributing to this shortage in housing, among which include a lumber shortage causing builders to scramble for supplies. Redfin chief economist Daryl Fairweather commented on some of these hurdles: "There's plenty of demand for new homes, but builders are facing a unique and costly set of hurdles as they attempt to satisfy that demand. Listings of new homes aren't bouncing back as quickly as listings of existing homes because, unlike individual homeowners, construction companies have to deal with lumber and labor shortages during the pandemic. They're also competing for labor and materials with folks who are renovating their houses during quarantine. The lack of new listings is keeping builders from reaching their full potential in terms of home-sales growth."