New vs. Existing Homes: Price Parity & Builder Incentives

New homes are nearing price parity with existing homes due to builder incentives & rate buydowns. Regional variations & builder bullishness impact costs. Mortgage rate volatility plays a key role.

It’s been a complex inquiry for years currently, and continues to be so even as rates for regular new and existing homes remain close to parity. New research from Realtor.com recommends that the distinction in the month-to-month cost of homeownership might be as little as $30 because of provide and stock dynamics, home mortgage rate volatility, and building contractor rewards.

Homeownership Costs: New vs Existing

In Q3 of 2025, the mean list price for a freshly constructed home was about $451,337 while the regular existing home cost regarding $409,667. The month-to-month settlement distinction is virtually negligible when thinking about that contractors usually provide reduced rate of interest prices as concessions to customers. According to Realtor.com’s Nov. 25 report, the 99-basis factor gap– 5.27% for new construction purchasers compared to 6.26% for existing home purchasers– in Q3 was the largest in years.

“I think existing home costs are mosting likely to pull away a little bit– or at the very least hold stable– and at the exact same time, new construction is mosting likely to reduce and focus on tasks with larger margin, higher-dollar homes,” he included.

“It really differs from region to region that national numbers are just so purposeful, yet it’s meaningful because it’s so common in those locations where [brand-new construction] is valued so reduced that it’s dragging that nationwide number down,” he included.

“If you remain in Connecticut, new builds are mosting likely to be a $2 million to $3 million big, brand new home– they’re not going to be a $350,000 home like you see in Texas and Florida and various other components of the South,” Berner stated.

An additional regular element is the bullishness of builders that have been supplying competitive rewards and concessions to draw purchasers and maintain their stock relocating. When home loan prices began to rapidly climb from document lows around 2022, building contractors had a chance to attract the purchasers who were evaluated of the existing home market with home loan rate buydowns and closing price credits.

“I assume it’s going to go back towards the kind of equilibrium it had remained in where there’s a bit more of a rate void. Contractors are being existing and really aggressive home sellers still have expectations that are expensive,” Berner claimed.

Regional Price Variations in Home Market

Regional variation and area also continue to play a role in the new-versus-existing price equation. The price of new homes is generally a lot reduced in Southerly markets contrasted to major metros in the Midwest and Northeast, where new homes still lug premium cost.

In Q3 of 2025, the mean listing price for a freshly built home was regarding $451,337 while the typical existing home cost concerning $409,667. The regular monthly settlement distinction is practically negligible when thinking about that home builders commonly supply lower rate of interest prices as giving ins to buyers. According to Realtor.com’s Nov. 25 report, the 99-basis factor gap– 5.27% for brand-new construction purchasers compared to 6.26% for existing home buyers– in Q3 was the largest in years.

Builders’ Incentives Attract Buyers

“I believe the genuine tale is just how inspired home builders are,” Berner explained.

The percent difference between typical sticker price for existing and new homes dropped to its least expensive third-quarter degree in Realtor.com’s information history, according to Realtor.com Elder Economist Joel Berner. However the difference was also lower last quarter and established a second-quarter document, Berner kept in mind.

“I think the real story is simply exactly how inspired home builders are,” Berner clarified.