3 things agents should know about new construction buyers 

New construction is playing a big role in today's real estate market.

New home sales typically make up about 10%-15% of the overall market, according to the National Association of Home Builders, but that figure has jumped in recent years. Since 2022, the share of new homes has often exceeded 30%, Redfin reports.

And that number could grow: NAR Chief Economist Lawrence Yun said in December that he expects new home sales to increase by 19% this year, as existing homeowners stay put to avoid giving up their locked-in low mortgage rates. 

Builders appear to be preparing for a strong year. The NAHB reports that private residential construction spending rose 0.2% between December and January and was up 12.5% compared to a year ago.

More new homes could mean more new construction buyers — so what should real estate agents know about these buyers and their needs? The 2024 New Construction Consumer Research Report from Realtor.com provides some answers. 

Here are three key takeaways.

New home buyers skew younger, wealthier

According to the study, millennials are the generation most likely to buy a new home, which is a shift from a few years ago when baby boomers were the biggest group of new home buyers.

Younger buyers are attracted to new homes, the survey found, because of the option to customize — and because they like the idea of a brand new home that won't need repairs.

"The newer generation of buyer tends to be a little less 'handier' than previous generations," said Don Turner, National Director, New Homes for Realtor.com. "This makes a new home, with new features and appliances, new home warranty and a lot less headaches, far more attractive."

Those features tend to come with a higher price tag, however, and the study found that new construction buyers had higher incomes. Of those who bought a new home in the past year, 30% had an annual income of $100,000 or more, compared to 22% of buyers who purchased an existing home.

New home buyers also tend to be repeat buyers. Just 23% of those surveyed were first-time buyers, the report found. In contrast, 32% of total buyers were first-time homebuyers in 2023, according to NAR data.

Buyers rely on real estate agents — and builders

The vast majority of new home buyers seek out the help of an agent. The Realtor.com report found that 94% of new construction buyers surveyed contacted a real estate agent at some point in the purchase process, and 28% reached out to an agent as soon as they started thinking about buying a home. 

Buyers were most likely to rely on an agent to help them get the best price, make a purchase decision and represent them during the process. "Buyers are ultimately looking to agents to be their advocate and their guide throughout the process — whether agents are facilitating a transaction between the buyer and a seller, or the buyer and a builder," said Elizabeth Sartain, Director of Product, New Homes for Realtor.com.

Builders, too, were seen as a resource, particularly for information about the property itself, and for their expertise around the process of buying a newly built home.

Communication between all parties is key

Buyers are talking to agents and builders during their home-purchase journey. The study found that 46% of new construction buyers reached out to their agent for information, but a slightly higher percentage — 53% — went directly to their builder's team.

Maintaining frequent communication with both the buyer client and the builder can help keep everyone on the same page.

"Most builders value their relationships with real estate agents and brokers, and when markets tighten, they value them even more," said Bob Seeman, VP of new home sales for Realtor.com. 

"The more builders and agents understand each other and the new construction building and selling processes, the better the experience will be for all involved, most importantly buyers."