Buying a new home is now cheaper than an existing one in many markets
Newly built homes averaged $205 per square foot in July, less than the $212 median for existing homes
The ‘money tree’ strategy Americans need to know
Financial influencer Taylor Price joins ‘Varney & Co.’ to break down how shifting your mindset can help Americans grow wealth and achieve the American Dream.
Buying a newly built home is now cheaper than purchasing an existing one in many U.S. housing markets.
Newly built homes now offer better value than existing homes nationwide and across one-third of major U.S. metro areas. In July, they sold for a median of $205 per square foot, compared with $212 for existing homes, according to a new Zillow analysis.
From 2018 through 2024, newly built homes sold for more per square foot than existing homes in 77 of 84 months.
"For years, buyers assumed new construction was out of their price range, and for most of the last decade, they were right," Zillow senior economist Kara Ng said in a statement to FOX Business. "That's changed. Zillow’s research finds new homes now sell for a median of $205 per square foot nationally, compared to $212 for existing homes."
TOP REAL ESTATE MOGUL ISSUES STARK WARNING AS CALIFORNIA BUYERS SAY 'ENOUGH IS ENOUGH' ON TAXES
Newly built homes sold for a median of $205 per square foot in July, compared with $212 for existing homes. (iStock / Getty Images Plus)
Ng added, "Buyers who haven't looked at new construction recently owe it to themselves to look again."
Over the past 19 months, builders have increasingly cut prices and offered incentives to move inventory. New homes sold at a discount to existing homes in 17 of those months, Zillow reported.
High mortgage rates have also kept many homeowners in place, reducing the supply of existing homes, the report noted.
The biggest discounts are concentrated in the Sun Belt, where a surge in homebuilding has given buyers more options.
Austin, Texas, tops the list, with new homes selling for 19.3% less per square foot than existing homes.
AMERICA'S BEST AND WORST CITIES FOR HOUSING AFFORDABILITY RANKED
Austin, Texas, tops the list, with new homes selling for 19.3% less per square foot than existing homes. (iStock)
Raleigh, North Carolina, follows with a 14.4% discount, while Tampa, Florida, rounds out the top three at 12.4%.
"Buyers are finding the biggest deals in the places where builders were most active," Ng said.
"Builders in those markets have inventory to move, and they know it, so prices are coming down, and they're sweetening deals with things like mortgage rate buydowns that a typical resale seller just can't offer."
Nationally, new homes accounted for 12.6% of all home sales in the 12 months through July 2026, though their share varied widely by market.
New construction represented 37.1% of home sales in San Antonio and 33.6% in Raleigh, compared with just 2% in Hartford, Connecticut.
LUXURY REAL ESTATE CEO GIVES BLUNT RESPONSE AS NYC RENTS SOAR OVER $100K AMID NEW PIED-À-TERRE TAX
New construction represented 33.6% of home sales in Raleigh. (iStock)
GET FOX BUSINESS ON THE GO BY CLICKING HERE
"What's happening in high-supply markets is proof of what happens when you build more," Ng said. "Affordability has improved in these places because builders had to compete for buyers. But we're still about 4.7 million homes short nationally and permitting is slowing down."
"The gains we're seeing today could reverse if we don't keep building. Local policy, including zoning reform and streamlined permitting, is the most direct lever we have."