The number of existing homes currently available for sale is low. It has been for years. But while that’s been a frustration for buyers, home builders see it as an opportunity. After all, buyers who can’t find an older home may decide to turn to a newly built home instead. These days, that seems to be the case, and it’s driving the recent rise in home builder optimism. The National Association of Home Builders’ Housing Market Index surveys builders each month in an effort to gauge their confidence in the market for newly built homes. The index ranks builders’ responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In May, the index rose for the fifth straight month and reached 50 for the first time since last July. Robert Dietz, NAHB’s chief economist, says buyers are turning to new homes. “Lack of existing inventory continues to drive buyers to new construction,” Dietz said. “In March, 33 percent of homes listed for sale were new homes in various stages of construction. That share from 2000-2019 was a 12.7 percent average. With limited available housing inventory, new construction will continue to be a significant part of prospective buyers’ search in the quarters ahead.” (source)
