Price Match? New Home, Existing Home Prices Come More in Line

Builders are offering major incentives—including on price—to win buyers’ attention.

By Melissa Dittmann Tracey

House hunters who’ve been struggling with limited resale inventory and rising prices may find relief in the new-home market—a segment often written off as too expensive. A major shift in pricing dynamics is making the new-home market far more competitive when up against existing homes—an opportunity that both buyers and real estate professionals may not want to overlook.

The traditional price gap between new and existing homes has narrowed dramatically. “An unprecedented change,” says Ali Wolf, chief economist for NewHomeSource and the housing research firm Zonda.

Historically, brand-new homes have carried a premium—sometimes to the likes of 20% to 40% more, Wolf says. But now, builders are offering aggressive incentives—such as price cuts, mortgage-rate buydowns and upgrade packages—that could make new construction more financially accessible than in years past.

“The data show that this is a unique period of time,” Wolf says. “You do not historically see new home prices and existing home prices that are about the same.”

The numbers underscore the shift. In May 2025, the median price of a new home sold in the U.S. was $426,600, while an existing home came in at $422,800—less than a $4,000 difference.

In some local markets, new homes are even coming in cheaper than the resale market. Wolf notes that in Raleigh, N.C., new homes are 2% less expensive than comparable resale homes.

Builders have been reacting to the home-buying affordability challenges head-on. “To help address affordability concerns and bring hesitant buyers off the fence, a growing number of builders are moving to cut prices,” Buddy Hughes, chairman of the National Association of Home Builders, said in a release about the latest NAHB and Wells Fargo Housing Market Index.

The survey showed that more than one-third of builders—or 37%—cut their home prices in June. That marks the highest share recorded since 2022. The average price cut was 5% in June.Meanwhile, 62% of builders reported offering incentives, such as interest rate buydowns, upgraded finishes, or help with closing costs. “From a consumer perspective, that’s an extra layer of savings,” Wolf says.

Mortgage-rate buydowns may become a particularly powerful tool, particularly considering elevated rates have been blamed for curtailing existing home sales over recent months. With rates still in the high 6% to 7% range, builders are stepping in with financing deals that could bring a buyer’s effective rate closer to 5%—or even lower.

And for buyers who don’t want to wait months for a custom build, “quick move-in” homes—properties already under construction—are becoming a growing option. These types of homes could be available in 90 days or less and can eliminate waits on construction timelines or the stress of choosing every finish.

Builders, however, are absorbing some of the cost of these added incentives. “It’s definitely hurting the builders,” Wolf admits. “This is eroding their margin. It’s making the cost of doing business higher.” Builders are exploring ways to trim their costs, such as shifting to lower-cost locations or designing smaller homes, townhomes, or attached housing to lower their price point, too. “There are a lot of builders going back to their architects and asking what they can do to still provide a nice home but … hit a lower price point,” Wolf says.

For buyers who are finding the resale market frustrating—where inventory is low and prices remain high—more real estate agents are prompting them to consider new-home construction sites and see if incentives could help sweeten the deal for their clients. “If you are a home buyer and you’re frustrated with the options in the existing home market … maybe it’s a bit outdated, needs a little work, and it’s expensive, why not look at a new home?” Wolf says. “It’s probably going to be a similar price, but it’s going to be brand new.”

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