Sep 03

When New and Existing Homes Go Their Separate Ways

In today’s housing market, new and existing home inventories are heading in opposite directions—and that’s a big deal for buyers and sellers alike.

What’s Going On?

  • Builders are busy—and it shows.
    Newly built homes still make up only about 10% of U.S. home sales, but thanks to increased construction, new-home inventory is finally growing—especially compared to the sluggish pre-pandemic years.
  • Existing homes are scarce.
    Listings of previously owned homes are stuck at roughly half the levels seen in 2019, creating fierce competition and multiple‑offer showdowns for mid-priced homes.
  • A brighter outlook for future sales.
    After consecutive years of almost 20% declines in existing-home sales, a rebound seems likely—with forecasts suggesting gains of 10–15% next year, and possibly 25–30% if more sellers enter the market.

Why Are Existing Homes Stuck?

Many homeowners are reluctant to sell because they’re locked into rock-bottom mortgage rates—2.5% to 3%—that are rare in today’s market. Letting go of those rates isn’t easy.

Yet, life keeps moving: from marriages and divorces to births, retirements, job changes, and relocations. Those milestones are nudging people toward selling—if mortgage rates improve even slightly.

Builders Have the Edge

Builders, by contrast, can easily increase supply. That flexibility, combined with smarter pricing and incentives, means new-home sales are rising even when overall sales remain soft.

Even Virtual Viewings Can’t Slow Down Buyers

Even though overall sales dipped a bit in August, buyers remain motivated. About 7% of purchases last month were finalized based solely on a virtual tour—virtually unchanged from the year before—a testament to how technology continues to reshape the market.

Quick Summary

FactorIn Motion
New HomesIncreasing inventory, leading to higher sales
Existing HomesLow supply holding back sales growth
Buyer DemandStrong, especially if rates improve
Market OutlookNew homes filling gaps—existing homes may bounce back with time

Why It Matters

  • Buyers: If you’re considering new construction, now may be a golden opportunity—stock and financing options are improving.
  • Sellers: Holding onto ultra-low mortgage rates makes sense—but if you’re prompted by life events and see even a slight dip in rates, it could be the perfect moment to make your move.
  • Agents & Industry Pros: This divergence underscores the importance of adjusting your strategy—embrace new-build opportunities while helping clients navigate limited resale options.

Source: REALTOR® Magazine
“New, Existing Home Supplies Diverge”
National Association of REALTORS®
Reprinted with permission

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