New Construction Homes Near Price Parity with Existing Homes – What This Means for Buyers

When it comes to buying a home, new construction has traditionally carried a higher price tag than an existing home. Older homes are generally more affordable, and that trend isn’t likely to disappear anytime soon.

However, the gap between new home prices and existing home prices has narrowed to a record low — making this a pivotal moment for buyers.

Record-Low Price Premium for New Homes

According to a new analysis from the National Association of Realtors® consumer website, the price premium for new construction homes fell to just 7.8% in the second quarter of this year. This is the smallest difference on record.

Danielle Hale, the site’s chief economist, says that increased new home construction has created more value for today’s homebuyers.

“In many areas, these homes are not only available, they also offer better value compared to existing home inventories,” Hale said. “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 buyers.”

National Average Price Per Square Foot

• New homes: $218.66 per square foot

• Existing homes: $226.56 per square foot

This surprising reversal — where the cost per square foot for new construction is actually lower than for existing homes — could present unique opportunities for buyers who have been hesitant to explore new builds.

Why This Matters for Homebuyers

• More options: Increased construction means a larger supply of homes.

• Greater affordability: Narrowing price gaps make new homes more attainable.

• Modern features: New builds often include energy-efficient designs, updated layouts, and fewer maintenance concerns.

• Location variety: Many builders are targeting growing suburban and exurban areas with strong resale potential.

Bottom Line

If you’ve been debating between buying a brand-new home or an existing property, the current real estate market trends suggest now may be the perfect time to explore new construction. With prices closer than ever — and in some cases even lower per square foot — buyers can enjoy the benefits of a new home without the steep premium of the past.