That newly built homes are highly coveted should come as no surprise to anyone who’s looked at the real estate listings lately, where an ever-growing share of the listings is new construction. The reason behind the trend is fairly straightforward: the number of existing homes on the market has never been smaller, so people on the move often have little choice but to build something new, said Douglas Duncan, chief economist for mortgage giant Fannie Mae. There are a few reasons that you can’t find a house to buy these days, Duncan said, but the biggest may be last year’s record low mortgage rates. “No one alive had ever seen that number for 30-year fixed rate mortgages since they were initiated back in the 1930s,” Duncan said. “They were never two-and-a-half percent.” And even though rates have now risen back to pre-pandemic levels, they haven’t risen fast enough or high enough to stop the housing market’s momentum, said Ryan Sweet, an economist at Moody’s Analytics in a commentary. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.
