New Residential Construction Prices and Sales Dip in U.S.

According to Redfin, sale prices for newly built homes in the U.S. fell 1 percent year over year to a median of $363,900 in the first quarter of 2019, the first such drop in seven years. Sales of new homes in the U.S. were also down 3.1 percent year over year in the first quarter of 2019, the third consecutive quarter of declines. Supply of new homes was up 4.2 percent in the first quarter, the fourth consecutive period of increases. The small declines in new-home sale prices and sales and the rise in supply were expected. Redfin first reported that demand for new homes was cooling in the second half of 2018 as builders started dropping prices and offering incentives to agents and buyers showing interest in new construction, such as free design upgrades. Connie Durnal, a Redfin agent in Dallas, said builders are now using other methods to lower prices for new homes in her area, such as smaller lot sizes and including fewer upgrades in spec homes (those that are built without a buyer lined up). Lowering prices is part of an effort to sell some of the new-home inventory that's been piling up in Dallas (supply of new homes in the Dallas metro was up 14.7% in the first quarter).