Denver's new builds can't meet housing demand
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Illustration: Trent Joaquin/Axios
New Denver homes are popping up and selling quickly, but supply still can't match demand.
Why it matters: As U.S. mortgage rates hit a 20-year high, golden handcuffs are locking up Denver's housing inventory, and that's fueling buyers' appetite for new builds, according to real estate experts.
The big picture: Sales of existing U.S. homes — the great majority of houses sold nationally — slid 19% from a year earlier, while new home sales soared 24%, according to June figures.
What they're saying: "What we're seeing in Denver is the new construction tends to be on the outskirts of town," Kelly Moye, a local Compass agent and spokesperson for the Colorado Association of Realtors, tells Axios.
- Northern Colorado, Southern Colorado and the Eastern Plains areas are now popular for builders because there's water and more land, so "they're able to provide a really nice new home for less money," Moye says.
Axios Denver reader Lauren Watkins said she started looking at houses in March and considered a new build, but ultimately purchased a home in Centennial.
- "We decided we would rather be in a fixer-upper in a nice neighborhood that was established, rather than a new home in an 'okay' area that was further away from the city that lacked trees and neighbors," she said.
Between the lines: The number of listings coming onto the Denver metro market is down roughly 29% compared to June 2022, per Redfin.
State of play: The new-build boost comes after rising rates curbed pandemic-driven home buying demand.
- Builder confidence is now at its highest level since June 2022, having declined every month that year, according to the National Association of Home Builders.
What we're watching: Some builders are offering smaller, more affordable houses to lure first-time buyers, Axios' Matt Phillips reports.
The number of new homes sold in the West rose 35% in June compared to a year earlier, per the U.S. Census Bureau.
- Existing home sales fell nearly 23% during that time, according to regional figures from the National Association of Realtors.
What's happening: New homes comprised nearly a third of total inventory in May, exceeding their typical 10%-to-15% share, according to chief economist Robert Dietz at the National Association of Home Builders.
Go deeper: Old houses now cost as much as new houses