The U.S. is still very much in a housing shortage, but builders have a lot of homes they are trying to sell as they face slower buyer demand, higher costs, and the threat of more tariffs.
Realtor Dani Robinson sees firsthand the financial stress people face when buying a home.
"I have one little gal right now, and she's in this market, and she's in that under $450,000 price point, and she's struggling a little," Robinson said.
One option homebuyers should consider is new construction, according to Realtor.com Chief Economist Danielle Hale.
"Especially if you are in regions of the country where we've seen a lot of new construction, and that's in the South and in the West," Hale said.
RELATED STORY | Homebuilding is getting even more expensive and volatile under new tariffs
In August, there were 124,000 new, completed homes for sale, according to data from the U.S. Census Bureau and U.S. Department of Housing and Urban Development. That's a level the U.S. hasn't seen since the financial crisis in 2009.
Mike Garabedian is a homebuilder and owner of Garabedian Properties in the Dallas-Fort Worth area. He says in that region alone, jobs have slowed from about 100,000 new jobs per year to about 60,000.
"We're building 45,000 new homes but only selling 30-something thousand homes," Garabedian said.
Even though the U.S. is still facing a housing shortage, many potential buyers cannot afford the homes on the market. Garabedian says the $300,000 to $400,000 homes that buyers are after are now $500,000 to $700,000.
"Higher interest rates increase our cost of funds to borrow, which directly increases the cost to build the homes," he explained.
Another factor, according to Garabedian, is ever-changing building codes.
"Cities adopt them and that's adding tens of thousands of dollars to houses," he said.
Hale says an elevated supply could benefit those ready to buy, with some builders offering incentives and deals.
"Everything from mortgage rate buydowns to cash at closing to appliance upgrades or inclusions in the buying package. So if you haven't considered new construction, it is worth taking a look," Hale said.
IN RELATED NEWS | Gen Z is saving tens of thousands for homes. Will they ever get the keys?
Garabedian says lower mortgage rates have sparked more interest in building or buying.
"We're seeing movement in many different market segments. We're not where we need to be, but it's going the right direction," Garabedian said.
He's confident newly built homes will sell. It's just a matter of when.
New builds are following the same trend as existing home sales. Sales of previously owned homes were flat in August, and they are taking longer to sell.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
