The price gap between a new or existing home is closing, according to the National Association of Home Builders. During the first quarter, the median sales price of a new home was only $14,600 more than an existing home.
“There are several reasons why new and existing homes are selling at similar price points,” the association said. “For existing homes, tight inventory continues to push up prices … both new and existing homes saw dramatic increases in prices post-pandemic due to higher construction costs and limited supply.”
The median price for a new single-family home sold in the first quarter was $416,900, according to the association’s review of U.S. Census Bureau and National Association of Realtors data.
The average difference over the last five years was $26,700, whereas the decade prior (2010-2019) saw a much wider gap of $66,000.
According to the NAHB/Wells Fargo Housing Market Index (HMI), 34% of builders cut home prices in May, up from 29% in April and the highest level since December 2023 (36%). More than half of home builders (61%) used various sales incentives, including mortgage rate buydowns.
