A report from Redfin shows that 29% of single-family homes for sale in the U.S. were new constructions in the third quarter of 2022. This increased inventory of new constructions for sale represents the highest percentage of third quarter listings of all time. The percentage of new properties for sale was 25% in Q3 2021 and 18% in Q3 2020.

“Homebuilders started scores of projects during the pandemic moving frenzy and are now stuck with a bunch of new houses that are hard to sell because mortgage rates have risen to 7%,” said Houston Redfin agent Faith Floyd. “Many builders are offering more incentives than regular sellers. A lot of individual sellers are still pricing their homes too high because they’re having a hard time accepting that the pandemic housing boom is over and they’re not going to get 30 offers like their neighbor did last year.”

Redfin Deputy Chief Economist Taylor Marr says builders will likely slow down construction rates in 2023. “Homebuilders will take on fewer projects next year as they focus on getting their existing projects sold,” she said. “Builders will also shift more toward multifamily units, for which there is still relatively high demand because rents remain high.”

Of the cities with the highest shares of new homes for sale, metros in Texas and Florida are at the top of the list. Notably, new construction made up half of all single-family homes for sale in El Paso in Q3 of this year. Also on the list were Houston (37%) and North Port-Sarasota (35%).