Tri-Cities new home market up, but it’s doubtful it can match U.S. rates

Although data is not available, the local new home market appears to be having one of the best years it has had in a decade.

Buyers rushing to the new-home market have surged sales to the highest pace since 2006. Sales are up 36% from last year, according to the U.S. Department of Housing and Urban Development and Census Bureau. Unfortunately, those agencies don’t offer current sales and price data. One of the best sources is the Tennessee Housing and Development Agency and 2019 is its most current data offering.

There’s no argument that the Tri-Cities new home market has made some big gains. Still, a comparison of the 2006 new home market to 2019 shows the Tri-Cities still has a lot of catching up to do. To get to the level currently being used for the U.S. market local sales would have to triple last year’s growth rate.

The description Cuck Fowke, chairman of the National Association of Home Builders is using to surmise the U.S. market fits the Tri-Cities situation like a glove.

“Consumers are being driven by low-interest rates, a growing focus on the importance of housing, and a shift in buyers seeking homes in lower density areas. Despite these positive conditions, affordability challenges remain, especially as builders are dealing with building cost increases, including a dramatic rise in lumber costs in recent months.”

The NAHB reported a spike in softwood lumber prices that has added an average of $14,116 to the cost of a new single-family home since April 17.

The median sales price for a new home in July was $330,600, up 7% from a year ago. Last year the highest median sales price was the in Washington Co. market – $259,900.

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