New construction has taken up a growing share of the for-sale housing pie because homebuilding has increased and the number of individual homeowners selling has decreased. Builders are offering sizable discounts to attract buyers and offload inventory, but they’ve also boosted prices.

Nationwide, 31.8% of U.S. single-family homes for sale in the fourth quarter were new construction, comparable with 31.9% a year earlier, which is the highest level of any fourth quarter on record.

This dataset is seasonal, which is why we compare the fourth quarter of 2023 with past fourth quarters. The share typically peaks in the first quarter and troughs in the second or third quarter. The highest share of any quarter on record is 34.5% in the first quarter of 2022.

Newly built homes are taking up a growing share of the for-sale housing pie for two primary reasons:

Homebuilding has increased. Homebuilding has been on an upward trajectory since 2009 as builders have slowly climbed their way out of the hole caused by the Great Recession. Construction also jumped during the pandemic as builders responded to surging homebuyer demand fueled by record-low mortgage rates.

The number of homeowners putting their houses on the market has decreased over the last year and a half. That’s because mortgage rates started rising in 2022 and jumped to a 23-year high in 2023, prompting many homeowners to stay put instead of selling and losing the rock-bottom rate they scored during the pandemic. While mortgage rates have fallen a bit in the last few months, this “lock-in effect” continues to hamper listings, which are higher than they were a year ago but remain far below pre-pandemic levels.

Homebuilders have been offering sizable concessions, including money for mortgage rate buydowns, to attract bidders and offload inventory. That has made it hard for some individual sellers of existing homes to compete for buyers.