And the supply of both newly built and previously occupied homes for sale have dwindled. Fewer homes for sale have helped drive prices higher and made many markets more competitive.
Though new homes represent less than 20 percent of the housing sales market, they have an outside impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenues, according to data from the National Association of Homebuilders.
The gains in home building helped boost construction hiring in December by 30,000 jobs, the most in 15 months.
Still, the number of first-time buyers remains low, which has limited sales. Many are unable to qualify for historically low mortgage rates because banks have adopted tighter credit standards and are requiring larger down payments..