New Home Construction Slows, Moves to The Exurbs

The new home market benefited from a lack of existing homes for sale in 2023. Low inventory of previously owned homes meant many buyers turned to new homes when looking for options to buy. That was an opportunity for home builders. Now, according to a new report from the National Association of Home Builders, new home construction has begun to slow due to elevated rates, climbing costs, and labor shortages. Robert Dietz, NAHB’s chief economist, thinks it’ll rebound quickly. “The data continues to show that home building has slowed, but there are signs that it is beginning to turn a corner heading into the end of the year as the Federal Reserve has paused rate hikes as inflation continues to slow,” Dietz said. So where are the most new homes being built these days? Well, between the second and third quarter of this year, large-metro outlying counties posted the largest increase in single-family market share. That means construction was increasingly moving to the exurbs, the area beyond the suburbs, even as overall construction slowed. (source)

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