Since when has it been cheaper to buy new than used? In today’s housing market, that’s exactly what’s happening.
According to the latest Census data and the National Association of Realtors, the median price of a new home is $401,000—about $34,000 less than the median price of an existing home, which sits at $435,000. That’s a major inflection point in housing, reversing the long-standing trend where new construction has always commanded a premium.
This isn’t a blip. The price spread has been narrowing since the pandemic. For a brief time if flipped, then swung back to normal. But now, we’re three months into the reversal—and it’s sticking.
What happened?
- A glut of new homes hit the market just as high mortgage rates sidelined buyers
- Builders, stuck with unsold inventory at a 16-year high, were forced to respond.
- Today, 66% of builders are offering incentives—from mortgage rate buydowns to closing cost credits—in order to move product, according to the National Association of Home Builders.
Meanwhile, the investor market is also shifting. Traditional rule of thumb says: budget 5% of gross rents for maintenance on an older home. But for a new property? It’s closer to 1%. Add in better efficiency and fewer vacancy headaches, and suddenly the math is tilting investors towards buying new builds instead of old fixers.
So what does this mean for buyers?
For once, new construction may be the bargain—not just in upfront price, but in long-term operating costs. Lower maintenance, energy savings, builder incentives, and even stronger tenant demand can all tip the scale.
The big question: is this a short-term quirk of high rates and builder oversupply? Or are we witnessing the start of a longer-term trend where “new” doesn’t just look nicer—it looks smarter.
CHART: Old vs. New: What You Get in Today’s Market
|
Category |
Existing Home (Median $435K) |
New Home (Median $401K) |
|
Price |
Higher — $34K more than new |
Lower — $34K less than resale |
|
Maintenance |
~5% of gross rents annually |
~1% of gross rents annually |
|
Energy Costs |
Older systems, higher bills |
Modern efficiency → lower bills |
|
Incentives |
Rare, seller-by-seller |
66% of builders offering incentives (rate buydowns, closing cost credits, upgrades) |
|
Condition |
Renovation often needed |
Move-in ready, under warranty |
|
Occupancy / Rentability |
Slower lease-up, higher vacancy risk |
Faster lease-up, lower vacancy risk |
|
Equity Play |
Built-in neighborhood history & charm |
Potential upside in newer developments |
