The Takeaway: If you’re looking for a good price on a newly constructed home, then El Paso, Texas, may be the place for you.
Newly built homes made up about 31% of U.S. single-family homes on the market in the second quarter, according to the residential real estate brokerage Redfin. That's the highest share of any second quarter on record.
There are plenty of good reasons to buy new construction, but let’s start with the obvious: One of the best things about buying a brand-new home is that, well, it’s new.
Related: 15 places to move to if you want to buy a house on a $100,000 salary
“Buying a new construction home gives you a clean slate,” K. Hovnanian, the homebuilding company, wrote in a recent blog post. “There’s no red shag carpet, rooms covered in floral wallpaper, or pastel-colored bathrooms you’ll have to change as soon as you move in. Working with a new home builder gives you the opportunity to put your touch on your home without having to lift a finger.”
Those perks don't have to come at a premium. In fact, in today's high interest rate environment, some builders are even lowering prices on newly built homes to offload excess inventory, Redfin data journalist Dana Anderson wrote in a blog post.
Driving the surge in new construction was a combination of several factors, including the "pandemic homebuying frenzy" and rising interest rates, Redfin said.
During the pandemic, remote workers migrated for more affordable housing and created so-called pandemic boomtowns. Building permits for single-family homes shot up in 2021 and 2022, and many of those completed properties are now on the market, Redfin said. Meanwhile, the majority of single-family homeowners are locked in to lower mortgage rates, so fewer existing homes are for sale.
"For many homebuyers, new construction is a welcome option in today’s market —especially in the southern part of the country, where new homes tend to be more prevalent," Anderson wrote.
Using data provided by Redfin, we’ve identified the housing markets where new-home construction makes up roughly one-third or more of the homes for sale, and the median sales price of those homes falls under $485,000.
In these cities potential homebuyers have a lot of fresh inventory to choose from — and it’s relatively affordable. The median sales price in the U.S. was about $440,500 in July, according to Redfin.
New home construction was most common in El Paso, Texas, the sixth-most populous city in the Lone Star State. In the so-called Sun City, which has about 680,000 residents, newly built homes accounted for more than half of for-sale homes in the second quarter, roughly a 4% increase from a year earlier.
Incidentally, the median sales price of newly built homes in El Paso was one of the lowest on the list, at just under $280,000.
There are areas, of course, where there is very little new construction, in some cases due to lack of land and building restrictions. Honolulu had the least new home building activity in the country in the second quarter, followed by San Diego, Pittsburgh, Oxnard, Calif., and Detroit.
| U.S. metro area | Share of new-build, single-family homes for sale, Q2 2023 | Median sales price |
|---|---|---|
El Paso, TX |
52.10% |
$279,950 |
Omaha, NE |
45.50% |
$436,287 |
Raleigh, NC |
42.10% |
$467,000 |
Oklahoma City, OK |
39.30% |
$346,069 |
Boise, ID |
38.30% |
$484,990 |
Houston, TX |
35.30% |
$356,915 |
Richmond, VA |
34.80% |
$479,950 |
Greenville, SC |
33.80% |
$358,195 |
Charleston, SC |
33.80% |
$439,500 |
Tulsa, OK |
33.10% |
$359,396 |
San Antonio, TX |
32.20% |
$329,800 |
Fort Worth, TX |
31.80% |
$400,000 |
Charlotte, NC |
31.30% |
$424,023 |
Austin, TX |
30.40% |
$463,990 |
Lakeland, FL |
29.60% |
$348,070 |
McAllen, TX |
29.10% |
$256,500 |
Dallas, TX |
28.40% |
$453,488 |
