Newly built home sales spike in Des Moines and the Midwest
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Des Moines' market for newly built homes is thriving as fewer homeowners want to sell.
Why it matters: With U.S. mortgage rates at a 22-year high, golden handcuffs are locking up 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%, per June figures.
Zoom in: In the Midwest, the sales of both new and existing homes followed — and even eclipsed — the national trend.
- The number of newly built homes sold in the region jumped a staggering 58.5% in July compared to a year earlier, per the latest U.S. Census data.
- Existing home sales dropped 20% during that same period, according to regional figures from the National Association of Realtors.
What they're saying: New home construction has become more predictable in our metro, following post-pandemic supply struggles.
- "You're not having to wait six months for a stove," Ted Weaver, a RE/MAX realtor tells Axios.
State of play: The boost for new builds also 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.
The big picture: While the Midwest isn't experiencing the same sheer number of new home sales as the South or West, the "slow and steady" pace of the area also protects it from the housing bubbles larger cities, like Phoenix or Salt Lake City, have experienced, Weaver said.
What we're watching: Some builders are offering smaller, more affordable houses to lure first-time buyers, Axios' Matt Phillips reports.
Go deeper: Old houses now cost as much as new houses