If you are struggling to find a home you like, it may be time to widen your search. When the supply of homes for sale is limited, looking only at existing homes can leave you with a small pool of options.
A newly built home is another option worth considering. Some new homes are finished and ready to move into. Others are still being built, which may give you an opportunity to help choose features and finishes.
The key is understanding what is available, how far along construction is, and which choices fit your needs. Here is how to make sense of the construction picture and use it to guide your search.
Why New Construction Belongs in the Conversation
The National Association of Realtors has described new construction as a bright spot during a period of limited housing choices. In the report cited in the original version of this article, NAR noted that buyers faced limited options even during what is typically the busiest homebuying season.
That report put the supply of existing homes at about half the level of its earlier comparison period. That was a description of the market covered by the report, not a permanent inventory benchmark.
The practical takeaway is straightforward: when existing homes are not giving you enough choices, include newly built homes in your search. You do not have to decide that new construction is the answer before you explore it. Start by finding out whether it offers something the homes you have already seen do not.
Three Construction Terms Worth Knowing
Reports about homebuilding often discuss completions, starts and permits. These terms describe different stages of the construction process. Understanding the difference helps you separate finished homes from homes that are still on the way.
Completions: Finished Homes
New residential completions are newly built homes that are finished and ready to move into. For a buyer whose timing matters, this is the category to discuss first with a local real estate professional.
Rather than asking only about new construction in general, ask specifically about recently completed homes. That keeps the conversation focused on homes where construction is already done.
Starts: Construction Has Begun
Residential starts are homes where construction has officially kicked off. They are part of the supply being built, rather than the supply already completed.
If you can wait and like the idea of helping select a home's features and finishes, homes under construction are worth discussing with your agent.
Permits: Construction Is Being Planned
Permits represent homes where builders are planning to break ground. In the construction picture described in the original article, both starts and permits were gaining momentum.
Those increases were a sign that more newly built homes were coming. The distinction for your search is important: planned construction, construction underway and completed construction are not the same stage.
How the Building History Helps Explain Limited Supply
The Census data discussed in the original article compared new-home completions with their long-term average. That comparison showed a period of overbuilding, followed by a prolonged stretch of underbuilding.
Leading up to the housing crash, builders completed homes at a pace above that historical average. The resulting oversupply contributed to declining home values and was one of the factors behind the crash.
Afterward, the level of new construction fell. Builders did not build enough homes to match the historical average, leaving the housing market with a multiyear inventory deficit.
That underbuilding helped explain the low inventory described in the original article. The shortage was not simply about which homes happened to be listed. It also reflected years of construction falling short of the historical pace.
What the Improvement in Completions Showed
At the end of the Census data series discussed in the original article, builders were again matching the long-term average for completions. They were bringing more finished homes to market than they had in the preceding period.
Together with rising starts and permits, that improvement showed momentum across several stages of construction. More homes were being completed, more were getting underway, and more were being planned.
Those figures describe the period covered by that report. For your own search, the useful question is what completed and in-progress homes are available in the areas you want to live.
Match the Construction Stage to Your Plans
If You Need to Move Soon
Ask a local real estate professional to help you explore recently completed homes. Because construction is finished, these homes may allow you to move quickly.
Be clear about your timing from the start. Ask which homes are complete and ready to move into, rather than treating every new-construction listing as the same kind of option.
If You Can Wait and Want Input
If your schedule allows you to wait, ask about homes that are still being built. Buying while a home is in progress can give you a chance to help choose features and finishes along the way.
That may be especially appealing if the homes you have toured do not match your taste. Instead of continuing to look for an existing home with the details you want, you can explore whether a home under construction offers the opportunity to select them.
Ask which choices you could help make. Keep the discussion tied to the particular home, your preferences and your timing.
Build a More Focused Home Search
A trusted local real estate agent is a crucial part of this process. They can identify available homes and base recommendations on your needs, preferred neighborhoods and other priorities.
Give that conversation a clear starting point:
- Explain what has been missing from the homes you have seen.
- Identify the neighborhoods you want to explore.
- Share how soon you would like to move.
- Decide whether choosing features and finishes matters to you.
- Ask to compare completed homes with homes still under construction.
Your next step is to add new construction to the conversation, not to commit before you explore. Ask a trusted local real estate professional what is available and which options fit your plans. To discuss the mortgage side of your home search, reach out to Ed Parcaut.
