Realtor.com: New Builds Becoming More Affordable

(Image courtesy of Realtor.com; Breakout image courtesy of Khwanchai Phanthong/pexels.com)

Realtor.com, Santa Clara, Calif., released its New Construction Quarterly Report, finding that newly built homes are starting to become more affordable–the median list price for Q1 2025 was $448,393, down 0.3% year-over-year.

That’s also down 1.3% compared with Q1 2023. The price of new homes peaked in Q3 2023 and has steadily declined since, in contrast with existing homes.

The premium on new construction, at 13.5%, was at its lowest level of any Q1 since 2020.

As new builds are becoming more affordable, they’re also making up a larger share of listings. For Q1, new builds were 18.5%, down slightly from 20.3% in Q1 2024, but higher than the first quarters of 2020-2022. Existing listings remain below where they were pre-pandemic.

The number of new builds ranges by region–the majority of new homes built in the past few years have been in the South and West. Meanwhile, the Northeast has the lowest share of new builds paired with the highest new-construction premium in the country.

In addition to the changes in pricing, new builds are also more likely to offer incentives such as mortgage buydowns. From 2022 to 2024, as mortgage rates increased, discounts for new-build buyers increased. In 2023 and 2024, new-home buyers paid about half a percentage point lower mortgage rates than existing-home buyers.