Could New Builds Hurt Your Market? These Areas Are Most at Risk

On The Market

BiggerPockets

News, Investing, Business, Education

4.8 • 820 Ratings

🗓️ 19 May 2025

⏱️ 31 minutes

🔗️ Recording | iTunes | RSS

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Summary

New builds are popping up everywhere. But some markets have a lot more new homes on the way. This could be risky for real estate investors in these areas, as steady demand and growing supply could put downward pressure on home and rent prices. Where are builders the most and least bullish in 2025, and which markets have so much supply that investors might want to steer clear? Today, we’re giving you a housing supply and inventory update. Austin Wolff joins us again to share findings from the latest builder sentiment survey—how confident builders are in today’s housing market—and which markets they’re building the most (and least) in. This is crucial as an investor, whether you rent or flip, since supply is one factor investors can’t control. Builder sentiment has seen a quick reversal from the 2020 - 2022 highs, but why are there still so many new development projects if builders are bearish? With permits finally getting approved, many builders are forced to complete projects, even during weaker market conditions, leading to lower prices for new build buyers and some dangerous “spillover” effects for investors in the market. In This Episode We Cover Why builder confidence has dropped so much, and why they can’t stop building (even with less profit) Markets seeing the most new construction and potential downward pressure on home prices Why now may be a great time to pick up a new build as developers give concessions The simple formula you can use to see if your market has too much supply for demand Could pessimistic builder conditions be better for appreciation in the long run? And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Sign Up for the On the Market Newsletter Find an Investor-Friendly Agent in Your Area How to Save Up to 20% on New Construction Homes Dave's BiggerPockets Profile Austin's BiggerPockets Profile Grab Dave’s Book, “Real Estate by the Numbers” Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/on-the-market-322 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠[email protected]⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	How confident are builders in today's market?
0:03.4	Every single month, we get new data that tells us exactly that.
0:06.5	And you might actually be surprised what the numbers say and the ways that they could impact
0:11.2	you, even if you're not a builder and never want to build a house in your life.
0:20.2	Hey, everyone. It's Dave Meyer, host of On the Market.
0:23.2	And today I'm joined by Bigger Pockets data analyst Austin Wolf to break down the latest
0:27.7	builder sentiment report and what it means for buyers and investors.
0:31.6	We're looking at which markets are seeing surges and permits and where builders are
0:36.3	betting big.
0:37.2	And we'll also dig into what this
0:38.9	means for the future of prices, inventory, rent growth, and how what's happening in the new
0:44.5	home market and with builders can actually spill into the broader housing market for buy
0:49.8	and hold and flipping investors. So let's get into it. Austin Wolf, welcome back to the podcast.
0:55.8	Thanks for being here. Happy to be here, Dave. All right. Well, we are going to be talking about builder
1:00.8	sentiment, builder confidence, what's going on in construction. But let's be real, most of us are not
1:05.6	builders. I have never built something from the ground up. I don't think you have either.
1:09.4	So tell us, why does this even
1:10.9	matter to the average real estate investor who's probably just doing buy and hold or maybe
1:15.0	some flip investing? I think it matters either if you are an existing investor or you're trying
1:20.2	to get your foot in the door. It matters both ways. If builders are optimistic, they're going to be
1:25.0	building more buildings. That means there's going to be more supply
1:27.9	coming your way. And if demand growth remains constant, but there is more supply, that puts a
	...

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