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New Construction Market – Q2 2025
🔻 New Construction Premium Hits All-Time Low
- The price premium of new construction over existing homes is now just 7.8%, the lowest on record.
- Median price of a new home: $450,797 (flat YoY).
- Median existing home price: $418,300 (up 2.4% YoY).
- New homes are cheaper per square foot:
- New: $218.66/sq ft
- Existing: $226.56/sq ft
🧱 Regional Trends
🔥 South Leads the Market
- Over 50% of national housing supply is in the South.
- It’s the only region where new home listings exceed existing home listings.
- Sharpest price drops in Southern metros:
- Little Rock, AR: -15.6%
- Austin, TX: -8.5%
- Wichita, KS: -7.9%
- Jacksonville, FL: -7.8%
- Cape Coral, FL: -7.4%
📈 West Shows Mixed Signals
- The only region where the new-home premium increased year-over-year.
- Due to rising new home prices and cheaper existing homes entering the market.
🏠 Northeast & Midwest
- Inventory is tight, and new builds are a premium product, priced >50% higher than existing homes in many cases.
📉 Builder Activity and Inventory
- Builder activity slowed due to tariffs and demand concerns, but:
- Completions remain strong.
- New construction listings ↑ 37.3% since Q1 2020.
- Existing home listings ↑ 15.4% (most of the increase came recently).
- New builds now make up 16.4% of listings (down from 20.2% in Q2 2023).
🔍 Buyer Behavior Insights
- Big-city demand (L.A., NY, Miami): driven by out-of-town buyers.
- Mid-size cities (Tucson, Toledo, Bakersfield): mostly local buyers.
- Cross-market searches for new builds are strong in Durham, Atlanta, Salt Lake City – suggesting people value new construction once exposed to it.
🔑 Bottom Line
- New construction is becoming more affordable and competitive with existing homes — a major shift in the post-pandemic housing market.
- The South remains the best value region, with strong inventory and falling prices.
- New builds are not just available — they’re often the better deal.