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Housing supply is commonly considered one of the primary drivers of affordability. Historically, we have seen a decline in the median square footage of new homes since 2022, which suggests that smaller new homes are being built and sold to address the high demand for more affordable housing. This raises the question: where are new homes making an impact in the market, and what trends in new-construction sales activity have we seen in recent years? 

Which Areas are Leading the Charge in New Home Sales?

New construction sales typically represent a much smaller portion of the overall home sales. In 2024 and 2025, the region with the largest proportion of new construction sales was the South (14.4% in 2025), which helps explain why Southern counties dominate the top rankings as seen below. Turning to square footage, new-construction homes were typically larger than existing homes across all regions, ranging from 7% in the South to 25% in the Northeast. This suggests that builders may be motivated by more affluent buyers generally, as square footage is a significant driver in home prices.

Let’s look at the top 10 counties in 2025 where newly constructed homes make up a significant portion of the total homes sold:

We can see that 9 out of 10 counties1 were located in the South. This is not surprising, given the region's relaxed land-use and building regulations. Looking at the top 100 counties by new construction sales share, we see 76% were in the South, 14% of counties in the Midwest, 9% in the West, and only 1% in the Northeast. New construction accounted for roughly 35%-52% of all sold listings in these counties, significantly higher than the national level (15.6%). While some counties saw lower square footage relative to existing homes, the majority had larger sizes, with some significant differences (20.9% in Rockwell, TX).

In terms of market activity, new homes are typically listed on the market for 15-20 days longer than existing homes. This is often because builders may list homes prior to completion, resulting in delayed showings and closings. 

Which Areas Show the Most Year-over-Year Growth2 in 2024-2025?

The South saw new construction sales decline by 3.7%, despite remaining more impactful overall than other regions. In the Midwest, builders completed and sold slightly more new homes than in the prior year (0.5%), with a slight decrease in median square footage (-0.7%). Will County, IL, shows a more pronounced version of this effect in the figure below. While the effect is more subdued at the regional level, it suggests interest in smaller homes, potentially driven by cost savings or the desire to attract younger home buyers seeking a starter home. The West experienced the largest year-over-year increase in new construction sales (2.4%). Given the region’s historically smaller share of new home sales, this suggests that even a modest increase in completed and sold new homes can produce a significant year-over-year gain in western markets, where resale inventory remains tight. In higher-cost areas, newly constructed homes may also compete more directly with existing inventory, especially when builders use incentives to offset affordability challenges.

Next, we will examine the counties3 that experienced the largest gains in new construction homes sold:

While Texas and North Carolina were the most prominent states in overall new construction, we see a more balanced spread of states when examining county-level year-over-year growth, with counties in Tennessee, Arizona, and Florida displaying the largest gains. Two out of the top three highest-growth counties were located in Arizona and Florida, which have been experiencing some of the strongest population and migration gains in the country, including inflows of retirees. Maricopa County, Arizona, experienced 43.7% growth in new home sales, followed by Clay County, Florida, with 38.0% growth. These demographic trends help keep housing demand strong and give builders greater confidence to bring new homes to market in these areas. Looking at square footage, there does not appear to be a consistent pattern of selling larger or smaller new homes except for Will County, IL, which displays a significant decline in median square footage (23.2%).

Similar to the top 10 counties discussed in the prior section, most growth has occurred in the South, with some standout counties in the West and Midwest. This is consistent with the idea that the South presents more building opportunities.

Relatively high new home sales may indicate a steady inflow of buyers in an area as supply expands. REALTORS® can use this by understanding the presence of new construction in their region and directing attention to counties where this effect is most pronounced. Additionally, comparing the average size relative to existing homes on the market can provide a rough idea of who the prospective buyers may be.

See the figure below for a map of 267 counties displaying the statistics discussed above:

1Counties were filtered based on inclusion in the Census housing units table (B25001), >1500 total sales, and a period of January-October for each year

2Calculations display the growth/decline of the total number of sales and average SQFT for each geography, not the proportion relative to total listings displayed in the prior section

3Counties were filtered based on inclusion in the Census housing units table (B25001), >500 new construction sold listings, and a period of January-October for each year