H
ome buyers who have been priced out of the new-home market may want to reconsider their options. The gap between the price of a brand-new home and an existing one has narrowed significantly, making it a more attractive option for those struggling with affordability. Historically, new homes have carried a premium due to modern finishes and updated layouts, but builders are now offering incentives like price cuts, mortgage rate buydowns, and upgrade packages to attract buyers.

    "This is a unique period of time," says Ali Wolf, chief economist for NewHomeSource and Zonda. "You don't historically see new home prices and existing home prices that are about the same." In April 2025, the median sales price of a new home in the U.S. was $407,200, while the median price of an existing-home sold in the same month was $414,000.

    Buyers facing affordability hurdles may be quick to dismiss new homes as too expensive, but that's no longer the case. In some areas, new homes are even cheaper than existing ones. For example, in Raleigh, N.C., new home prices are 2% lower than existing homes. This shift is beginning to resonate with buyers, who are now considering new-home construction and taking advantage of mortgage-rate buydowns and design upgrades.

    To address affordability concerns, builders are cutting prices and offering sales incentives like cash toward closing costs and upgraded interiors. In June, more than one-third of builders reported reducing their home prices, the highest share on record. Builders are also offering mortgage rate buydowns to reduce the interest rate on a 30-year fixed-rate mortgage to around 5%, making new homes a more attractive option for buyers.

    Real estate agents like Erica Wolfe are seeing an increase in clients considering new-home construction and taking advantage of these incentives. "Buying down those mortgage rates—that's huge for buyers right now," she says. Builders are also marketing "quick move-in" or spec homes, which can be moved into within 90 days, offering speed and savings to buyers.

    While the incentives come at a cost to builders, who are eroding their margins, they are exploring ways to make new homes more affordable, including building smaller homes and offering more affordable attached housing. With modern features, energy efficiency, and builder incentives on the table, new homes are attracting buyers who previously may have dismissed them.