According to the National Association of Home Builders, builder confidence increased in April for the fourth straight month. Despite still-elevated mortgage rates, a lack of resale inventory has built demand for new construction. Data from Redfin indicates new listings of homes for sale are down 25% from this time last year. Is the decrease in listings opening the door for more new construction?
It appears that may be the case. Historically, around 10% of housing inventory is new construction. Currently, that number is around 33%! The numbers are even more staggering in the Iowa City area, where 41% of single-family inventory is new builds and a whopping 58% of condominium inventory is new construction. And while single-family housing starts are down from their peak levels in 2021, they increased month-over-month in March and may be poised to continue rising if resale inventory doesn’t improve.