New Homes Now Cost $20K Less Than Existing Homes
In an unusual reversal of long-standing trends, new home prices have recently dipped below those of existing homes, something not seen in at least a quarter-century. According to Realtor.com, June 2025 marked the height of this shift, with the median price for new homes at about $407,200—approximately $28,000 less than existing homes, a 6.5% discount. Even with the gap narrowing to nearly $19,000 (4%) by July, this continues a record-setting fourth consecutive month of inversion. Builders are offering incentives like closing-cost assistance and rate buy-downs that further reduce effective costs, while also introducing smaller yet still larger-than-average floor plans. On a per-square-foot basis, new construction now averages about $218.66, compared to $226.56 for existing homes.
This trend stems from a mix of fundamentals: new-home inventory is high, especially in the South, giving builders the incentive to price aggressively to move units. Meanwhile, sellers of existing homes often hold out for unrealistically high prices, leading to a less nimble resale market. With more listings and slower turnover, the traditional resale pricing signals might not reflect real demand or market reality. For buyers, particularly in markets where premiums have fallen dramatically, this moment presents a rare opportunity: brand-new homes at relative discounts.
