In a surprising turn of events, new homes are now selling at a discount compared to existing homes, a trend that has not been seen in at least 25 years. This shift is driven by various factors such as declining new-home prices and increased incentives offered by builders. The market dynamics between new and existing homes are evolving, leading to a unique situation for homebuyers and sellers alike.
FULL STORY: New Homes Now Cost $20K Less Than Existing Homes. Can This Trend Last?
Key takeaways
-
New homes are currently being sold at a discount compared to existing homes, with the median sales price of new homes being $28,000 less than existing homes, representing a 6.5% discount, the largest in at least 25 years.
-
Builders are offering incentives like cash at closing and reduced mortgage rates, making new homes even more affordable than their sticker price suggests.
-
Despite new-construction homes trending towards smaller floor plans for affordability, they are still generally larger than existing homes but are priced lower per square foot.
-
The new-home market is experiencing a supply glut, with builders more motivated to sell and pricing aggressively due to weaker demand, while sellers of existing homes may be holding out for better prices, leading to a standoff between buyers and sellers.
-
The current market situation raises questions about the efficiency of the resale market, with the potential for a price correction if sellers lose control or a stabilization if they maintain dominance, depending on future economic factors like mortgage rates and incomes.
This summary has been generated with AI tools and edited by Realtor.com News & Insights editors. The full story, written and edited by Realtor.com News & Insights newsroom journalists, is linked at the top of the summary.