Chart: New Construction Interest Falling on Material Costs
Only 15% of buyers were looking for a newly-built home at the start of 2018, but that share shot up to 42% by the final quarter of 2020 (after the start of the pandemic). Since then, however, interest for new construction has fallen steadily, as costs for building materials – especially lumber – have experienced double-digit growth. By the final quarter of 2021, the share had dropped to 25%. Meanwhile, 39% are ambivalent between a new or existing home, up from 27% a year earlier. These results come from NAHB’s latest Housing Trends Report.
The share of buyers who’d prefer a newly-built home declined in every region from the third to the fourth quarters of 2021: in the Northeast, from 34% to 28%; in the Midwest, from 21% to 16%; in the South, from 31% to 21%; and in the West, from 39% to 32%. The shares at the end of 2021 are also significantly lower than a year earlier in every region. Across generations, only 24% of Gen X buyers were looking to buy a new home at the end of 2021, down from 48% a year earlier.
* The Housing Trends Report is 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 fourth quarter of 2021. See previous post on plans to buy.