Chart: Material Costs Eroding New Construction Preference
Preference for newly constructed homes skyrocketed in 2020, as buyers looked for homes with more square footage and amenities in which to work remotely, school children, exercise, etc. By the fourth quarter of 2020, 42% of prospective buyers preferred new construction. Since then, however, rising new home prices (driven by a 31% increase in the cost of building materials) have eroded the preference for new homes. By the first quarter of 2022, and after falling for five straight quarters, the share of buyers looking for new construction has returned to pre-pandemic levels: 19%.
New construction has lost preference in every region of the country. From peak to now, the share of buyers who’d prefer a newly-built home dropped in the Northeast (60% to 19%), Midwest (27% to 14%), South (33% to 21%), and West (51% to 24%).
** Results come from the Housing Trends Report – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets. The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult. Results are seasonally adjusted. A description of the poll’s methodology and sample characteristics can be found here. This is the second in a series of six posts highlighting results for the 1st quarter of 2022.