Real Estate News
In Q3 of 2025, there was only a $30 difference in the monthly payments for typical new and existing homes, a new report from Realtor.com suggests.
Key points:
- When taking national median prices and mortgage gaps into account, Realtor.com researchers found that the monthly costs between new and existing homes are almost negligible.
- Many builders are still offering rate buydowns on new homes, a strategy that is easing affordability challenges for some homebuyers.
- But the trend could be coming to an end soon, economic researcher Joel Berner predicts, especially as existing home prices drop and builders pivot to pricier, higher-margin new home construction.
Do new and existing homes cost the same?
It’s been a complicated question for years now, and remains so even as prices for typical new and existing homes stay close to parity. New research from Realtor.com suggests that the difference in the monthly cost of homeownership may be as little as $30 due to supply and inventory dynamics, mortgage rate volatility, and builder incentives.
In Q3 of 2025, the median list price for a newly built home was about $451,337 while the typical existing home cost about $409,667. But the monthly payment difference is almost negligible when considering that builders typically offer lower interest rates as concessions to buyers. According to Realtor.com’s Nov. 25 report, the 99-basis point gap — 5.27% for new construction buyers compared to 6.26% for existing home buyers — in Q3 was the widest in years.
A record-low price gap
The percent difference between median list prices for new and existing homes dropped to its lowest third-quarter level in Realtor.com’s data history, according to Realtor.com Senior Economist Joel Berner. But the difference was even lower last quarter and set a second-quarter record, Berner noted.
“It’s a pretty consistent trend,” he told Real Estate News.
The trend itself is nothing new. Fierce competition for existing inventory and a new construction boom that took off as the economy was rebounding from the pandemic caused unusual movements in the housing market. In June of 2023, the gap between new and existing homes almost closed entirely when the typical existing home cost $410,200 and the median new home price was $415,400.
Location still factors in
Regional variation and location also continue to play a role in the new-versus-existing price equation. The cost of new homes is typically much lower in Southern markets compared to major metros in the Midwest and Northeast, where new homes still carry premium price tags.
“If you’re in Connecticut, new builds are going to be a $2 million to $3 million big, brand new home — they’re not going to be a $350,000 home like you see in Texas and Florida and other parts of the South,” Berner said.
“It really varies from region to region that national numbers are only so meaningful, but it’s meaningful in that it’s so prevalent in those areas where [new construction] is priced so low that it’s dragging that national number down,” he added.
Builder incentives ease affordability concerns
Another consistent factor is the bullishness of builders who have been offering competitive incentives and concessions to lure buyers and keep their inventory moving. When mortgage rates began to rapidly climb from record lows around 2022, builders had an opportunity to attract the buyers who were priced out of the existing home market through mortgage rate buydowns and closing cost credits.
Reduced mortgage rate concessions remain the most common promotion listed on Realtor.com, the report indicated.
“I think the real story is just how motivated builders are,” Berner explained. “They’re offering below market mortgage rates, and when they do their own financing, are accepting smaller down payments — it’s [addressing] a lot of the hurdles to affordability that buyers have right now.”
What’s next?
So how will the price gap between new and existing homes shift from here — and how long will builders have the drive and budget to slash rates while construction costs rise?
“I think it’s going to go back toward the sort of equilibrium it had been in where there’s a little more of a price gap. Builders are being really aggressive and existing home sellers still have expectations that are too high,” Berner said.
“I think existing home prices are going to retreat a little bit — or at least hold steady — and at the same time, new construction is going to slow down and focus on projects with larger margin, higher-dollar homes,” he added.