Homebuyers look to new builds as fewer owners sell

The 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 the nation's housing inventory. That's fueling buyers' appetite for new builds, according to real estate experts.

The big picture: Sales of existing U.S. homes — the majority of houses sold nationally — slid 19% from a year earlier, while new home sales soared 24%, per June figures.

Zoom in: The number of new homes sold in the South rose 21.4% in June compared to a year earlier, per U.S. Census data.

• Meanwhile, existing home sales fell 16.2% during that time, according to regional figures from the National Association of Realtors.
• The median price in the South this July was $366,200, up 1.7% from July 2022.

State of play: The new-build boost comes after rising interest rates curbed pandemic-driven homebuying demand.

• Builder confidence is now at its highest level since June 2022 after declining every month last year, according to the National Association of Home Builders.

What they're saying: Miami-based Lennar, the second-biggest homebuilder in the U.S., closed on 68,817 homes in 2022, according to Builder magazine.

• In a quarterly earnings call in June, executive chairman Stuart Miller said prospective buyers had accepted a "new normal" of higher rates, per Barron's.

What we're watching: Some builders are now 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