Have High Home Prices Reduced Buyer Interest in New Homes?
The share of prospective home buyers looking to buy a newly built home peaked at 42% in the fourth quarter of 2020, before falling to 38% and 33%, respectively, in the first two quarters of 2021.
The drop is most likely the direct result of strong gains in new home prices in 2021, which have been driven by double-digit growth in the price of goods used in residential construction. These results come from NAHB's latest Housing Trends Report.
In contrast, the share of buyers looking only at existing homes rose from 31% in the final quarter of 2020 to 35% in the second quarter of 2021, while those who will buy either new or existing homes increased from 27% to 32% of all prospective buyers during this period.
Regionally, the share of buyers who would prefer a new home peaked in the Northeast and West in the first quarter of 2021 at 60% and 51%, respectively, before falling to 34% and 40% in the second quarter of the year.
In the South, the share peaked in the third quarter of 2020 at 33%, but is now at 30%. In the Midwest, the share peaked in the final quarter of 2020 at 27%, but is now down to 19%.
Rose Quint, NAHB’s assistant vice president for survey research, provides more analysis in this Eye on Housing blog post.
Latest from NAHBNow
Sustainability and Green Building
May 12, 2026
3 Reasons to Build to the National Green Building StandardThe new edition of the National Green Building Standard focuses on building for the future by addressing these real-world challenges through sustainable building practices. Here are three benefits to building your next residential project to the NGBS.
Economics
May 11, 2026
U.S. Economy Adds 115,000 Jobs in AprilThe U.S. labor market continued to show resilience in April, with job growth persisting despite elevated interest rates and rising geopolitical uncertainty related to the Iran conflict. The unemployment rate held steady at 4.3%.
Latest Economic News
Economics
May 12, 2026
Inflation Outpaced Wage Growth in AprilInflation accelerated to a nearly three-year high in April, driven by continued increases in energy costs from the Iran war. Energy costs drove more than 40% of the monthly increase, with national gasoline prices soaring above $4.50 in early May for the first time since July 2022.
Economics
May 12, 2026
Consumer Credit Accelerated in Q1 2026In the first quarter of 2026, consumer credit grew at a slightly faster pace than in years prior amid positive yet sluggish economic growth and rising inflation pressure. According to the Federal Reserve’s G.19 Consumer Credit Report, total outstanding U.S. consumer credit reached $5.14 trillion in the first quarter of 2026.
Economics
May 11, 2026
Existing Home Sales Edged Up Slightly in AprilExisting home sales edged up in April after reaching a nine-month low in March, but sales remained at historically low levels. Elevated mortgage rates and reignited inflation driven by the Iran war continued to weigh on affordability as economic uncertainty pushed up long-term rates, while rising energy costs strained household budgets.