Prospective homebuyers are dealing with a tough real estate market right now. Homeowners who have a 2 or 3% mortgage rate aren’t selling, according to Zillow. And with mortgage rates staying high, there’s stiff competition for resale homes in the market.

There may be a new route homebuyers are turning to instead, as the tide appears to be turning against America’s housing shortage.

Builder Bill Metzger has been in construction for almost 30 years in the Hudson Valley. He says his team of construction workers represents the heart and soul of what they do.

“It’s always exciting when we see a new house go up out of the ground, you see concrete go in [the] ground for the first time,” said Metzger, president of Peak Construction.

Mortgage rates being at their highest level in two decades would typically put a dent in housing.

However, new construction is booming. Metzger says it’s unlike anything he’s seen in years. A report by the U.S. Census Bureau says single-family homebuilding surged in July 2023, an increase of about 7%. And overall home building is also on the rise.

Low inventory in the existing home market means more Americans are turning to new home construction, according to the National Association of Homebuilders.

People are still looking for houses, about the same demand there always is, but now that interest rates are so high people don’t want to sell their homes, so there’s just not a lot of inventory on the market,” Metzger said.

One challenge to raising supply Metzger says is breaking new ground. Permits for future construction in the U.S. rose slightly in July, according to the U.S. Department of Commerce, increasing for six straight months, lifted by rises in the Midwest and South. Single-family building permits faded in the Northeast.

“There’s not a lot of ready-to-build land out there, so this is a subdivision. It’s 40 acres, it’s an eight-lot subdivision. It was started prior to ‘08 and didn’t get built on because of the recession, so this was ready to go. We were able to buy it and build all these houses and meet this demand,” he said.

Metzger says he loves his job building the home of someone’s dreams. However, he remains cautiously optimistic about the resilience of the housing market and this current boost.

“By the time the market cools off and corrects, we might have a soft landing, where we don’t have another recession in the building market like we did in ’08,” Metzger said. “That’s what I’m hoping for as a builder.”

Metzger says his advice for first-time homebuyers is to be patient, shop around and be ready when something hits the market by making a good offer.