New Homes Now Cheaper Than Used Homes for First Time Since 1974

For the first time since at least 1974, new homes are selling for less than existing ones, a phenomenon attributed to a combination of builder incentives and sellers' reluctance to lower prices. In the first quarter of 2026, the median price for a new single-family home was $403,200, which was $1,400 less than the median price of an existing home, reported at $404,600. This marks the fourth consecutive quarter where existing home prices have surpassed new home prices, a trend that began in the second quarter of 2024. Typically, new homes command a premium over existing properties, averaging 16% since 1987. However, by April 2026, this premium had turned negative, reaching -2%, a first in five decades of data collected by John Burns Research & Consulting.

Alex Thomas, research manager on the macro team at John Burns, stated that while some of this data point is an artifact of methodology, it also reflects genuine supply and demand dynamics. Builders have been adapting by constructing smaller homes; the median size of a new home sold has decreased to approximately 2,400 square feet, down from around 2,500 square feet in 2022 and 2,700 square feet in the mid-2010s. This reduction in size contributes to lower prices, partially explaining the discount compared to the existing home market, which tends to feature larger properties. The National Association of Home Builders (NAHB) also points to builders constructing on smaller lots and shifting production towards the South as factors influencing prices. Furthermore, builders are offering incentives to clear inventory, even as construction costs rise, partly due to tariffs on building materials that the NAHB estimates have added as much as $9,200 to the average new home price.