The price premium for new-construction homes over existing homes has fallen to an all-time low, according to a new report from the Realtor.com® economic research team.
The median listing price for a newly built home in the second quarter of 2025 held mostly steady at $450,797, while the median existing-home price jumped 2.4% to $418,300, according to the New Construction Quarterly Report.
It means the typical new home cost just 7.8% more than the typical previously owned home, the lowest recorded in data going back to 2016.
“In a market still grappling with a shortage of nearly 4 million homes, affordable new construction plays a critical role in restoring balance,” says Realtor.com Chief Economist Danielle Hale. “Even with recent slowdowns in starts and permits, builders continue to deliver new homes to the market at a healthy pace.”
On a square-foot basis, new homes now actually tend to be cheaper than existing homes. Nationally, new builds typically list for $218.66 per square foot, compared with $226.56 for existing homes.
However, this affordability edge isn’t distributed nationally, and in many markets new homes remain more expensive per square foot than existing homes.
The biggest discounts tend to be found in the South and West, where new homes make up a significantly greater share of for-sale listings, and weak demand has led builders to make price cuts.
“In many areas, these homes are not only available, they also offer better value compared to existing-home inventories,” says Hale. “We’re even seeing new-home price declines in some of the most active pandemic-era hot spots, signaling a shift toward greater affordability in markets that were previously out of reach for many.”
South leads in new-home inventory
While residential construction activity has slowed this year as builders navigate tariff concerns and historically weak demand from homebuyers, new-construction inventory has expanded dramatically over the last five years.
Since the first quarter of 2020, new-construction listings have surged 37.3%, while existing-home listings are up just 15.4%, with most of that recovery occurring in recent months.
The South continues to lead the nation in housing supply, accounting for more than 50% of both new- and existing-home listings in the nation, while representing just 39% of all U.S. households.
In contrast, the Northeast remains the most inventory-constrained region, with a significant shortage of both existing and new-construction homes in proportion to its share of U.S. households.
Despite the gains over the last five years, the nation remains in a housing shortfall estimated at nearly 4 million units, following a prolonged period of underbuilding relative to demand.
Where new home prices are falling
Last quarter, median listing prices for new builds declined annually in 30 of the 100 largest metros, with the steepest declines in the South, where inventory is high and demand has cooled.
The top five markets seeing the biggest drops in new-construction list prices are Little Rock, AR (-15.6%); Austin, TX (-8.5%); Wichita, KS (-7.9%); Jacksonville, FL (-7.8%); and Cape Coral, FL (-7.4%).
These price drops are from a combination of factors: builder efforts to offer more affordable options, rising competition from existing homes, and weaker buyer demand in those markets.
Out of the top 100 metros, median list prices for newly built homes are rising the fastest in Syracuse, NY (18.8%); St. Louis (16.8%); Los Angeles (16.1%); New Haven, CT (13.7%); and San Francisco (11.2%).
