SEATTLE, Feb. 11, 2020 /PRNewswire/ -- (NASDAQ: RDFN) — New-home sales rose 8.8% year over year in the fourth quarter, the biggest gain in more than two years and the third-consecutive quarter of increases, driving continued depletion of inventory in the market, according to a new report from Redfin (www.redfin.com).
New-home supply slid 11.1% year over year, the biggest inventory drop since at least 2012 and the third-straight quarter of declines.
National sale prices of new homes slipped 0.3% year over year to a median of $369,900 in the fourth quarter. That marks the smallest drop out of the past three-consecutive quarters of declines. But even though the national median price was flat from last year, many affordable markets, including Greensboro, NC, saw prices rise.
Meanwhile, existing-home prices rose 6%, sales increased 5.8% (the largest gain in three years) and inventory slipped 14.2% (the biggest slide since 2013).
"The market has seen a mismatch between where new construction of homes are needed the most and where new homes are being built, and that's because builders are focused on areas where they can cheaply acquire and develop land," Redfin chief economist Daryl Fairweather said. For example, expensive cities like San Francisco have seen a decline in building permits, while construction is booming in places like Raleigh, NC and El Paso, TX, which are already quite affordable.
"The only way to solve this mismatch between where people need homes and where homes are being built is for people to move to where the homes are, and that's already happening," said Fairweather. "Looking ahead, permits have increased thanks to low interest rates, so even though inventory is down, there's hope for the future given that permits are up so significantly."
One region with a particularly large swell in building permits is Little Rock, AR, which saw a more than 200% increase in the fourth quarter.
"New home construction in West Little Rock and surrounding cities has been surging. The area has a lot of rural space, so there's plenty of room for expansion. Plus, it's affordable to build here compared to other parts of the country," said local Redfin team manager Bonnie Nixon. "One trend we're seeing is developers demolishing older homes and rebuilding more modern ones."
To read the full report, including additional metro-level highlights and new construction trends, please visit: https://www.redfin.com/blog/new-home-construction-q4-2019/
Redfin (www.redfin.com) is a technology-powered real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry's lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 85 major metro areas across the U.S. and Canada. The company has closed more than $85 billion in home sales.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, subscribe here. To view Redfin's press center, click here.