Where are America’s new homes?
That question keeps boiling up to the surface, as buyers grapple with the current state of the housing market. High prices and soaring mortgage rates are driving affordability into the dirt. And lurking at the center of all buyer challenges is one towering and inescapable bugaboo: the lack of available homes. It’s simple math. Fewer homes = increased competition, higher prices, and epic levels of frustration.
Last year, new-home construction permits for single-family dwellings declined by about 14% over the previous year—and it’s hardly a new trend. Since the 1990s, U.S. housing starts per 1,000 households have been about half of what they were for the preceding 30 years. The building slowdown spiked in the wake of the 2008 housing crash, then again with the supply-side issues of the COVID-19 pandemic. The current shortfall in new construction is estimated to be as high as 6 million homes.
But not all corners of the U.S. are quite as new-home parched as others. There are still places where builders are putting up new homes to meet buyers’ demands, especially in more affordable areas where dollars stretch further. And Realtor.com® searched out those metros.
Most of these places are in the South, where land is more readily available, expensive building regulations are fewer, and prices aren’t as crazy as they are in states like California.
And among the locations on this list are several pandemic hot spots, including Austin, TX and Boise, ID, which has seen a flood of new residents in recent years.
“Builders are simply following where more Americans are moving,” says George Ratiu, a senior economist and manager of economic research at Realtor.com. “These are fast-growing cities, with a lot of lifestyle amenities and a lot of young people and professionals moving in. Builders have recognized this and are trying to catch up to this incredible growth.”
It’s true that new homes are generally more expensive. In January, the median price tag on a new home was $427,500, according to the most recent data from the U.S. Census Bureau and U.S. Department of Housing and Urban Development. That was about 19% more than the list price of an existing home, which was $359,000, according to the National Association of Realtors®.
But the advantages of buying a newly built house are far more significant than you might think. The bigger builders are often more willing to cut prices below what a typical homeowner can stomach when negotiating with a buyer. Builders can also sometimes get more creative with financing, including mortgage rate buy-downs that can save buyers big bucks as an incentive.
Another benefit? New-home buyers get to select the cabinets, counters, paint, and other finishes on the front end. Who wouldn’t want to sidestep the tedious renovations that often come with an existing-home purchase?
To come up with this list, Realtor.com dug into the Census Bureau’s 2022 new-home construction permit data, as permits are a strong indication of future new construction. We identified the metro areas with the most new single-family home construction permits per capita, to arrive at the places with the most new homes slated to be built—relative to the local population. (This ensures the largest metros, such as New York City, don’t dominate the ranking.)
We limited our list to just one metro per state to establish geographic diversity. Metros include the main city and surrounding towns, suburbs, and smaller urban areas.
So where are America’s new home-building boomtowns? Here’s what we found.
Get all the details on Realtor.com
Related Links
If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
