New homes providing needed inventory

“Moving into the spring home selling season, builders showed signs of optimism in anticipation of more buyer demand,” said Kelly Mangold of RCLCO Real Estate Consulting. “However, interest rates and development costs remain high, while prices are softening — which is impacting the potential upside on home sales.”

And mortgage rates remain volatile for buyers. Rates climbed half a percentage point throughout February, but are now cooling again as uncertainty in the banking industry has sent investors to the relative safety of bonds.

Historically low inventory of existing homes — many owned by homeowners reluctant to sell and part with an ultra-low mortgage rate — is pushing many buyers toward new construction housing.

“The number of existing homes on the market has reached record low levels which is giving new homes less competition — and they are often one of the only options for motivated buyers,” Mangold said.