Have High Home Prices Reduced Buyer Interest in New Homes?

Housing Affordability
Published

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.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Labor

Feb 27, 2026

Labor Department Proposes New FLSA Independent Contractor Rule

The U.S. Department of Labor (DOL) today published notice of its intent to revise its regulations that distinguish covered employees from exempt independent contractors for enforcement purposes under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA) and other laws.

Advocacy

Feb 27, 2026

NAHB Invests $190,000 to Advance Local Pro-Housing Policies

NAHB's State and Local Government Affairs Committee recently approved $190,000 through the State and Local Issues Fund (SLIF) to help HBAs overcome barriers to housing affordability.

View all

Latest Economic News

Economics

Feb 27, 2026

Price Growth for Building Materials Slows to Start the Year

Residential building material prices rose at a slower rate in January, according to the latest Producer Price Index release from the Bureau of Labor Statistics. This was the first decline in the rate of price growth since April of last year. Metal products continue to experience price increases, while specific wood products are showing declines in prices.

Economics

Feb 26, 2026

Home Improvement Loan Applications Moderate as Borrower Profile Gradually Ages

Home improvement activity has remained elevated in the post-pandemic period, but both the volume of loan applications and the age profile of borrowers have shifted in notable ways. Data from the Home Mortgage Disclosure Act (HMDA), analyzed by NAHB, show that total home improvement loan applications have eased from their recent post-pandemic peak, and the distribution of borrowers across age groups has gradually tilted older.

Economics

Feb 26, 2026

Affordability Pyramid Shows Over Half of U.S. Households Cannot Buy a $300,000 Home

NAHB recently released its 2026 Priced-Out Analysis, highlighting the housing affordability challenge. While previous posts discussed the impacts of rising home prices and interest rates on affordability, this post focuses on the related U.S. housing affordability pyramid.