An increasing number of homebuyers are turning to new home construction. According to the National Association of Homebuilders (NAHB), sales of newly built, single-family homes increased in April to the highest level since March 2022.
Interest rates have more than doubled since 2021, leading many homeowners with lower mortgage rates to stay in their homes instead of moving. That is contributing to a scarcity of existing homes which are often priced at a premium, and a decision by homebuyers who don’t want to wait to opt for a new construction homes.
In Florida, residential building permits have increased 38% since 2019, the second highest increase in the country. The Tampa Bay region is also seeing an increase in permits with 21% more permits issued in 2022 compared to 2021 – one of the biggest year-over-year increases statewide.
Additional research from NAHB finds that the inability to find an affordable home is the number one reason perspective buyers who have been searching for three months or more are unable to make a home purchase. That’s followed by not finding a home with desired features, in a desired neighborhood, or being outbid.
Builders face persistent challenges in meeting the demand for new residential construction including high construction costs, supply shortages, and a lack of skilled labor. However, the industry is cautiously optimistic that this focus on new home construction will continue for the remainder of 2023.