Is this the current trend in real estate sales?

Question

New-home sales account for around 15% to 20% of all recent home sales and could reach 30% in some markets, compared with a historical average of 10%, according to Lawrence Yun, chief economist at the National Association of Realtors. What's your opinion on this?

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Brett Deas · Answer

My guess is as long as interest rates are high, the new home sales will increase. With their interest rate incentives, and the only ones who have inventory they solve pretty much every buyers problem right now.

Trevor Schmitt · Answer

New-home sales numbers are certain to rise due to the historically low inventory of existing homes on the market right now.

A majority of homeowners have an interest rate around 3% and are very reluctant to sell their home and enter the market as a buyer where they will be looking at a mortgage rate of at least 2x that amount.

Because buyers who are in the market have little options when it comes to existing homes, they are turning towards building.

Peter Mckernan · Answer

Low inventory of existing homes is the one that is fueling this to the tone of 82.5% of homeowners per Redfin data show that they have a 5% interest rate or lower. There really is nothing getting people to move from their home except, life events, job movement, more kids, less kids, retirement, or passing away. Also, this does not take into account the people that have paid off houses.

There is nowhere for people/buyers to go except for the small number of existing sales and new construction. This number till continue to go up until there is downward numbers on rates, which who knows that will be where people feel good to move.

Is this the current trend in real estate sales?

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