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U.S. Cities Driving the New Home Construction Boom

As the United States grapples with a staggering shortage of nearly 4 million homes, the need for new residential construction has never been greater. A recent report from Realtor.com highlights the top U.S. metros that are not only addressing this crisis but also setting a benchmark for affordability, sustainability, and buyer demand in newly built homes.

Meet the Leaders in New Construction

Realtor.com examined over 100 metropolitan areas to identify which cities are making significant strides in new home construction. The analysis considered various factors, including the share of new-home listings, price premiums compared to existing homes, climate risk, and buyer interest, as indicated by views per listing and the time homes spent on the market. The following cities emerged as leaders:

1. Fayetteville-Springdale-Rogers, Arkansas
2. Boise City, Idaho
3. Nashville-Davidson-Murfreesboro-Franklin, Tennessee
4. McAllen-Edinburg-Mission, Texas
5. Portland-South Portland, Maine
6. Madison, Wisconsin
7. Greenville-Anderson-Greer, South Carolina
8. Austin-Round Rock-San Marcos, Texas
9. Charlotte-Concord-Gastonia, North Carolina-South Carolina
10. Raleigh-Cary, North Carolina

Why These Cities Stand Out

According to Danielle Hale, the chief economist at Realtor.com, the top metros for new construction stand out because builders are delivering much-needed housing inventory at prices aligned with local market demands. In fact, in several of these areas, new homes account for nearly half of all available listings. What's more, many newly built homes are being priced at or below the cost of existing homes, offering buyers a realistic chance of homeownership.

High-quality, energy-efficient, and modern homes are not only appealing for their aesthetics but also for their resilience against climate risks. For instance, areas like Fayetteville, Arkansas, and Raleigh, North Carolina, report that newly constructed properties make up over 40% of all listings and are often cheaper than their older counterparts. Fayetteville's median listing price for new homes is currently $399,717, notably less than the existing median home price of $418,375.

The Role of Economic Trends

Strong local economies and job growth are critical to the success of these metros. In cities like Boise, Idaho, which ranks second, over 51% of the listings are new constructions, providing ample options for buyers. The median price in Boise for new homes is $540,743, less than the price for existing homes ($559,517), while also showcasing climate-smart construction practices that minimize risks of hazards like wildfires and floods.

Additionally, cities like Nashville and Austin are capitalizing on their booming job markets to attract more residents. The influx of new construction in these areas is not only helping to address housing shortages but is also creating pathways for affordable homeownership.

A Converging Trend Across the Nation

Interestingly, this trend is not limited to the South; various regions across the country are also represented in the top ten rankings. For example, Madison, Wisconsin, in the Midwest, and Portland, Maine, in the Northeast, showcase the diverse potential of midsize cities and college towns to attract new residents and investments from various sectors, including technology and manufacturing.

The underlying message is clear: improving the housing supply nationwide is critical for ease of access to affordable living. Buddy Hughes, chairman of the National Association of Home Builders, emphasized that effective policies at state and federal levels are necessary to eliminate regulations hindering new constructions and to encourage sustainable building practices that benefit communities.

Let America Build

This report aligns with Realtor.com's Let America Build initiative, which advocates for strategies to facilitate more new home constructions. The initiative promotes cutting red tape and revising restrictive zoning laws to foster environments where builders can operate efficiently.

Through identifying and promoting cities that effectively respond to housing demands, the Realtor.com campaign seeks to make homeownership accessible to more Americans. The path ahead is promising, as communities across the nation strive for sustainable, affordable housing solutions.