T
he US housing market is experiencing an unusual phenomenon, where the median price of existing homes has surpassed that of new homes. According to a recent report from the National Association of Home Builders (NAHB), the national median sale price for single-family homes dipped to $410,800 in the second quarter, while the median price of existing homes rose to $429,400. This inversion is attributed to a combination of factors, including tight inventory and rising prices for existing homes.

    Historically, new homes have been more expensive than existing ones, but the NAHB notes that this trend has reversed since 2020. The cost of new homes spiked during the pandemic-fueled supply chain crunch, but has since seen year-over-year drops for nine consecutive quarters. In contrast, existing home prices have experienced eight consecutive quarters of year-over-year increases.

    Regional trends reveal a different picture. In the Northeast, the median price of a new home is nearly $800,000, significantly higher than the $537,000 median for existing homes. The Midwest also sees a notable difference, with buyers paying more for newer construction, where the median new home price is $385,300 versus $328,800 for existing homes. In contrast, the West has a larger gap between new and existing home prices, with the typical existing home costing $115,000 more than the typical new home.

    The Midwest boasts the lowest overall median price for existing homes, while the West's $646,100 median is the highest. The South region had the lowest median price for new construction at $372,100, while the Northeast was by far the most expensive, with a median nearly double that of the South.