Monday Market Update: The Metric At It’s Highest Level Since 2009

The 2025 story of real estate is just beginning to unfold, and there is one chapter you may not have heard about yet – but you should. Dow Jones and Market Watch are reporting that the “number of newly built homes for sale on the market is at the highest level since 2009.” Similarly, the US Census Bureau reported that 2024 ended with a year-over-year increase of newly built homes up 10%. So… why aren’t more buyers excited? 

First, let’s remember that real estate is a very local industry. While the national average supply of new construction homes nationwide is 9 months, that number is not representative of all markets or even consistent across any one state. Regional differences across the US and within each state vary greatly – and there are more new homes in some places and fewer in others. The related figure to that is how much of the market share new homes account for, and what price and existing inventory home trends are present in each locale as well. 

Second, the elephant in the room (that nobody likes to talk about) is that we are amidst a zoo of… affordability challenges. With mortgage rates crawling above 7%, most typical home buyers cannot afford to buy a home at current prices with current rates. Data indicates this is the most ‘unaffordable’ time to buy a home in recent history. 

Despite all of this, there is good news! While rates may not present a favorable environment for the average buyer, purchasing a new home is unlike the average process. Builders are uniquely positioned (and highly motivated) to offer incentives to buyers. This includes but is not limited to mortgage rate buydowns and price reductions. The NAHB has reported that 30% of builders cut prices in January, by an average of 5%. Realtor.com® has reported that the West has the highest share of new construction listings with mortgage rate buydowns offered, followed by the South. 

In the spirit of full transparency, there are analysts who believe high home builder inventory could be a warning sign of a recession. However, Newsweek asserts that “not all experts agree that this is an imminent sign of a recession. Some experts think high housing inventory is a good sign because it fills the gap in the existing home market, boosts construction activity and meets strong demand, which builders expect will result in a robust spring market.”

There is no crystal ball – but there is a clear trend that there are more new homes on the market now than in over 15 years. What that means for you will depend on the supply and demand in your area as well as your own short- and long-term plans. Knowledge is power and we share this information so you can choose to follow the trend in your area and adjust your personal strategy accordingly. 

Resources Used: Housing market hits a key level not seen since 2009; New-Construction Insights: Newly Built Homes Offer Value and Incentives; Why Housing Market Trend Is 'Alarming' to Real Estate Expert

Have a great start to February,

Bobbi 

Bobbi Decker
DRE#00607999

Broker Associate, Bobbi Decker & Associates
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www.bobbidecker.com
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