Urban New Construction Is Scarce, Expensive, and in High Demand, Realtor.com Finds
(Photo credit: Michael Tucker)
Realtor.com, Austin, Texas, recently examined construction trends and found a tale of two housing markets: an urban new construction market defined by scarcity and steep premiums and a suburban one marked by stability and competitive pricing.
The firm’s first quarter 2026 New Construction Insights Report found that while new construction has shown “remarkable resilience” overall, where new homes are being built is shaping who can afford them and how much they will pay.
Urban new builds are rare, the report noted. Nationally, just 10.9% of new construction listings are in urban zip codes, compared to nearly 30% of existing homes. When they do appear, buyers pay a significant premium: urban new construction carries a 78.4% price premium over urban existing homes, with a median listing price of $738,662 versus $414,000 for existing urban homes.
“New construction is overwhelmingly a suburban story in the United States, and that has real consequences for buyers who want to live in cities,” said Joel Berner, senior economist with Realtor.com. “Urban new builds are difficult to deliver, and that difficulty is priced in. When a new home does come to market in an urban zip code, it commands a price that reflects just how hard it was to build there.”
Where New Homes Are Built Determines How Much They Cost
New construction homes for sale are overwhelmingly located in suburban areas–and that impacts their price, the report found. Nearly 80% of new homes for sale are suburban, compared to just over 55% of existing homes. Suburban new builds carry just a 7.0% premium over suburban existing homes. Suburban new construction is plentiful, competitive, and concentrated in the South, where listing prices tend to be lower.
“Urban new construction is a different market entirely,” the report said. “New construction is underrepresented in urban areas. Nearly 30% of existing homes for sale are in urban zip codes, but just over 10% of new construction homes are.” The metros with the steepest urban new construction premiums include Miami, where urban new builds carry a median listing price of $2,578,695–a 461.8% premium over urban existing homes. St. Louis and Chicago also appear on the list, a mix that underscores that demand for urban new construction is not limited to expensive coastal cities.
