Homebuilders continue to face various challenges, from rising costs for materials to rising mortgage rates, as reflected in the data. Holden Lewis, mortgage expert at NerdWallet, also noted a new builder focus at the higher end of the market.
“More than a quarter of a million homes were for sale and under construction at the end of February, an unusually high number. Shortages of garage doors, windows and doors contribute to the construction backlog. Builders are selling to the higher end of the market: 33% of new homes sold in February cost $500,000 or more, compared to 22% in February 2021.”
Meanwhile, Danielle Halle, chief economist at Realtor.com, said the construction backlog pushed homebuilders to focus on pipeline management and on the completion of started homes instead.
“Still, a historically higher share of new homes for sale remain in the ‘not yet started’ category, not exactly a good alternative for a buyer seeking a move-in ready home,” Halle said. “Looking ahead, households planning to move can expect higher costs whether they aim to own or rent.”