New Homes Now Cost Less Than Existing

Seattle, WA, October 2, 2026—Buying a new home is now typically a better value than an existing home nationwide. A new Zillow analysis finds new homes now sell for a median of $205 per square foot, below the $212 median for existing homes. The relative discount for new homes is usually biggest where construction surged during the pandemic boom, particularly in the Sun Belt.

This reverses the trend in recent years, when new homes sold for more per square foot than existing homes in 77 of 84 months from 2018 to 2024. The price-per-square-foot premium for new homes peaked at $25 in November 2022. New homes have been selling at a discount relative to existing homes in 17 of the past 19 months, with builders more willing to cut prices and offer incentives to move inventory. The deepest discount was seen in June at $12 per square foot.

Where construction has boomed and inventory is plentiful, discounts run deeper as increased competition gives builders more reason to offer incentives. Where inventory remains locked up and new construction faces more hurdles, builder offerings lean toward the higher end and carry a premium.

“New homes are the overlooked opportunity more buyers should be thinking about. Buyers who assume new homes are out of their price range may be surprised at what they find,” said Kara Ng, senior economist at Zillow. “Where the most new homes have been built, buyers are in the best position to negotiate as sellers have a lot of other homes on the market to compete with. We often preach letting America build its way out of the affordability crisis, and these friendlier conditions are the payoff.”

Supply is the primary driver. The U.S. Census Bureau put the supply of new homes at 9.6 months in July 2026, up from 7.6 months just two years earlier and well above the roughly six months recorded in July 2018 and 2019.

While the supply of new homes sits well above pre-pandemic norms, inventory of resale homes remains 17.1% below where it was before the pandemic. Existing home sellers are generally in a strong financial position, benefiting from significant equity during the pandemic and low monthly payments locked in when mortgage rates were around 3%. There is less incentive for a resale seller to cut their price, especially when many have the option to relist their home as a rental if they do not receive an acceptable offer from a buyer. 

The deepest discounts for new homes are often in the markets that have built the most, such as Austin (19.3% price-per-square-foot discount), Raleigh (14.4%) and Tampa (12.4%). The opposite is true where new construction is scarce, including in the New York metro area (64.9% price-per-square-foot premium), Cleveland (50.7%), Milwaukee (46%) and Detroit (44.5%).