Buying a newly built home is now cheaper than purchasing an existing property in many US housing markets, reversing a trend that had generally made new construction the more expensive option.
A Zillow analysis found that newly built homes sold for a national median of $205 per square foot in July, compared with $212 for existing properties. New homes offered better value nationwide and in about one-third of major metropolitan areas. ([zillow.mediaroom.com](https://zillow.mediaroom.com/2026-09-29-New-homes-now-cost-less-than-existing-ones-in-one-third-of-major-markets))
The shift follows 19 months of builders cutting prices and offering incentives to clear unsold stock. Newly built homes sold for less per square foot than existing homes in 17 of those months, after commanding a higher price in 77 of the 84 months between 2018 and 2024.
Kara Ng, Zillow’s senior economist, said buyers who had previously ruled out new construction because of its cost should reconsider. Builders were increasingly using measures such as mortgage-rate buydowns to attract purchasers, she said.
Sun Belt markets offer the biggest discounts
The sharpest reductions have emerged in parts of the Sun Belt, where housebuilding expanded rapidly and developers now face greater competition for buyers.
Austin, Texas, recorded the largest discount, with new homes selling for 19.3 per cent less per square foot than existing properties. The gap was 14.4 per cent in Raleigh, North Carolina, and 12.4 per cent in Tampa, Florida.
New construction accounted for 12.6 per cent of US home sales in the 12 months to July 2026, although the proportion varied significantly between markets. It made up 37.1 per cent of sales in San Antonio and 33.6 per cent in Raleigh, compared with only 2 per cent in Hartford, Connecticut.
Zillow said the supply of new homes reached 9.6 months in July, up from 7.6 months two years earlier and above the roughly six months recorded in July 2018 and July 2019. By contrast, the stock of existing homes remained 17.1 per cent below its pre-pandemic level. ([zillow.mediaroom.com](https://zillow.mediaroom.com/2026-09-29-New-homes-now-cost-less-than-existing-ones-in-one-third-of-major-markets))
Higher mortgage rates have encouraged many existing homeowners to remain in their properties, particularly those with loans secured at rates close to 3 per cent. That has restricted the supply of resale homes and made sellers less willing to reduce their asking prices.
The discount is not universal. In markets where new construction is limited, newly built homes remain substantially more expensive per square foot. Zillow recorded a 64.9 per cent premium in the New York metropolitan area, 50.7 per cent in Cleveland, 46 per cent in Milwaukee and 44.5 per cent in Detroit. ([zillow.mediaroom.com](https://zillow.mediaroom.com/2026-09-29-New-homes-now-cost-less-than-existing-ones-in-one-third-of-major-markets))
Ng said the recent improvement in affordability could be reversed if housebuilding slows further. Zillow’s analysis estimates that the US remains short of about 4.7 million homes, while permitting activity has weakened.
The company said reforms to zoning rules and faster planning approvals would be among the most direct ways for local authorities to support additional construction and maintain pressure on prices.
