Over one-third of single-family homes on sale in the U.S. were newly built in the first quarter, according to data from real estate brokerage Redfin.

The relative amount of housing supply that is newly built is now around double what it was before the pandemic, at 33.4%.

This approaches the all-time record high of 34.5% reached two years ago and is around the same level as in the first quarter of last year.

This comes as homeowners are reluctant to let go of their houses, noted Redfin Premier agent Nicole Dege. Those who do put up their houses for sale are looking for prices in line with the 2022 peak.

The previous surge in prices was driven by the shift to remote work alongside cheap mortgages, as the Fed sought to keep the economy afloat by slashing interest rates.

“Builders have a better understanding of the current market, so they’re pricing fairly, offering mortgage-rate buydowns and providing other concessions to attract buyers,” she said.

Builders are also still looking to offload houses they built in 2021 and 2022 to meet record demand. There was 8.3 months of supply of new builds on the U.S. market in March, almost triple the 3.2 months of supply for existing homes.

However, the impact of the Fed’s rate hikes on mortgages and weakening demand have deterred builders from starting new properties.

According to the U.S. Census Bureau, around 1.36 million new houses are being built currently, down from 1.37 million one year ago.

Gen Z and Millennials buying the most

Much of the newly built property is being snapped up by Gen Z and millennial buyers, who—as Creditnews previously reported—took out nearly 40% of new mortgages in 2023.

That's a big leap toward homeownership, considering that just over 25% of adult Gen Zers and 55% of Millennials, respectively, owned their home at the end of last year.

“First-time buyers aren’t as spooked by high rates as people who are trying to move up to a bigger or better home,” noted Redfin agent Antonia Ketabchi.

“High costs are still a challenge, but younger people are excited about the fact that they’re looking to buy their first home, and they’re not locked in by a low mortgage rate because until now they’ve been renting.”