New homes are moving closer to existing listings as buyers look for better value

An expensive gap between purchases Newly built homes And existing homes shrank in the third quarter as builders looked to capitalize on demand incentives.

The price per square foot of new construction is lower than the price of an existing home in the south and west especially, according to Realtor.com’s third quarter report on new construction.

Both most of the South and West have an increased supply of new and higher construction Price reductionwhile the Northeast and Midwest and Midwest have a few new homes to build listed with modest price reductions.

“Builders have a good amount of specified inventory that they are trying to move right now as the market cools both periodically and in terms of price and sales growth,” said a senior economist at Realtor.com.

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Housing inventory in the south and west has returned to pre-judgment levels due to builders bringing in new construction, while newly built homes are priced in the double digits and all homes have higher depreciation rates than other regions, the report said.

Conversely, new construction is at a premium in the northeast as well Midwestand those regions had some of the hottest and friendliest housing markets in the country.

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Historically, buyers of new homes had larger down payments than those of existing homes, although that is changing. (Mario Tama/Getty Images)

Median price per square foot For new buildings it was $200 in the south and $292 in the west, while it was $353 in the northeast and $227 in Myeni, according to an analysis by RealRorn.com. For existing homes, those figures were $204 in the south, $320 in the west, $271 in the northeast and $168 in the Midwest.

“Now, New-Wakes are competitively priced with existing homes and are actually more expensive on a per-square-foot basis,” Berner said. “In a market where affordability is a top concern, new homes are priced to sell, and they offer attractive financing that eases the burden of the two most pressing parts of buying a home: the down payment and the monthly payment.”

Price reductions are the highest among newly constructed homes, with 15.1% of listings reducing their prices in the third quarter of 2025, the report said. Those reductions are rare in regions with more Depressed housing markets.

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Incentives such as mortgage rates and below-market mortgage rates are becoming increasingly common for homebuyers. (Stock)

In the south and west, where there is more supply, price reductions are more common, with 16.6% of new construction in the west and 15.9% of those in the west being reduced. In the Northeast, 7.8% of new buildings have reduced prices, and just 12.2% in the Midwest, according to the report.

A recent Real.com study found just that property measure TheDowns and below-market mortgage rates are common promotions to attract buyers to new construction given the elevated tax rates.

In the third quarter of 2025, the report showed that the 30-year mortgage rate for existing homebuyers was 6.26% – and new home buyers – New home buyers The 30-year mortgage rate was 30-year rates of 5.27%. Mortgage rates were 99 points lower for new home buyers in the third quarter, jumping from the previous two quarters, which were 51 to 54 points, respectively.

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Down payments on new home purchases are also declining despite new buyers historically building at a lower rate than those buying existing homes.

In the most recent quarter, new home buyers put down 15.7% of the purchase price while existing home buyers put down 17.8%. For comparison, in the third quarter of 2022, new home buyers put down 18.3% and existing home buyers put down 17.2%.