Arkansas, Idaho metros lead the pack for new-home construction

Realtor.com has released a report that ranks the leading U.S. metropolitan areas for new residential construction as the country faces an estimated shortage of 4 million homes.

The analysis examined the 100 largest metros based on the new-home share of listings, pricing compared to existing homes, climate risk and buyer demand.

Fayetteville-Springdale-Rogers, Arkansas, topped the list. Boise, Idaho; Nashville; McAllen, Texas; and Portland, Maine, rounded out the top five.

“Our top metros for new construction are places where builders are delivering much-needed inventory at price points that reflect local demand,” said Danielle Hale, chief economist at Realtor.com.

“With nearly half of the for-sale homes in some of these metros being new construction, and often being sold at or below the cost of existing homes, buyers in these areas have a real chance to find homeownership with high-quality, newly built homes at prices they can afford.”

Fayetteville topped the list as newly built homes, which were priced below the median for existing homes, accounted for more than 40% of for-sale listings.

New homes accounted for more than half of listings in second-ranked Boise. Other top markets — including Nashville, Austin and McAllen — also saw strong inventories of new homes often priced competitively with older properties.

“Our data shows that strong local job markets, builder investment and affordability are converging in these metros to create opportunity,” said Joel Berner, senior economist at Realtor.com. “When communities reduce zoning barriers and support sustainable building practices, it’s a win for affordability, livability and long-term resilience.

“These are the places helping to close the gap between supply and demand, and giving families a shot at the American dream.”

While the South dominated the rankings, Portland, Maine, and Madison, Wisconsin, also appeared in the top 10.

Many of the metros are midsize cities or college towns with relatively low costs of living, attracting both new residents and builder investment.

“The only way to ease the nation’s housing affordability crisis is to increase the housing supply and local, state and federal governments all have an important role to play,” said Buddy Hughes, chairman of the National Association of Home Builders.

“We need to enact policies at all levels of government that will eliminate burdensome regulations, promote careers in the skilled trades and alleviate permitting roadblocks to allow builders to construct more attainable, affordable housing.”