By The Epoch Times | Created at 2026-09-29 17:46:58 | Updated at 2026-09-29 19:30:47
1 hour ago
Newly built homes are now selling for less per square foot than existing homes on average nationwide and in roughly one-third of major U.S. housing markets, a new analysis from Zillow suggests.
New homes sold for a median of $205 per square foot in July, compared with $212 for existing homes, Zillow said on Sept. 29.
That marks a sharp reversal from recent years. From 2018 through 2024, newly built homes carried a higher price per square foot than existing homes in 77 of 84 months. The premium peaked at $25 per square foot in November 2022.
In 17 of the past 19 months, however, new homes have sold at a discount as builders cut prices and offered more incentives to attract buyers.
“New homes are the overlooked opportunity more buyers should be thinking about,” Zillow senior economist Kara Ng said. “Buyers who assume new homes are out of their price range may be surprised at what they find.”
The gap is especially big in markets where home construction boomed in recent years, particularly across the Sun Belt.
In Austin, newly built homes cost 19.3 percent less per square foot than existing properties. The discount was 14.4 percent in Raleigh and 12.4 percent in Tampa, according to Zillow.
By contrast, new construction still carries a sizable premium in markets where building is more limited.
In the New York metropolitan area, new homes cost nearly 65 percent more per square foot than existing homes. Premiums exceeded 40 percent in Cleveland, Milwaukee, and Detroit.
Zillow points to supply as the primary reason for the difference.
According to the U.S. Census Bureau, the supply of new homes stood at 9.6 months in July 2026, up from 7.6 months two years earlier and well above the roughly six months recorded in July 2018 and 2019.
That gives builders in high-construction markets more reason to lower prices or offer concessions to move unsold inventory.
A report by Realtor.com suggests that, in August, 18.8 percent of new-construction listings offered some type of buyer incentive. Reduced mortgage rates appeared on 13.8 percent of listings, with an average advertised first-year rate of 3.92 percent.
Existing homeowners, by contrast, may be less willing to cut asking prices, particularly if they have substantial equity and low mortgage rates locked in from earlier years.
“There is less incentive for a resale seller to cut their price, especially when many have the option to relist their home as a rental if they do not receive an acceptable offer from a buyer,” Ng said.
Government data also show that new-home prices have been moving lower. The median price of a newly built home sold in August was $393,700, down 5.8 percent from a year earlier, according to the Census Bureau. New-home sales rose 6.4 percent from July to an annualized rate of 684,000.
Existing homes, by comparison, had a median sale price of $429,100 in August, up 1.6 percent from a year earlier, according to the National Association of Realtors.
Despite the growing value advantage, new construction remains a relatively small part of the overall market. Newly built homes accounted for 12.6 percent of U.S. home sales during the 12 months through July, Zillow said, although the share exceeded 30 percent in markets including San Antonio, Raleigh, and Austin.
