It’s one of the most surprising shifts we’ve seen in the housing market in decades: brand-new construction homes are now selling for less than resale homes. If that sounds shocking, you’re not alone—it goes against everything buyers and sellers have come to expect. But in 2025, the numbers don’t lie.

As a Los Angeles real estate agent who’s been helping clients buy and sell in all market conditions, I’ve seen this trend firsthand. Let’s break down what’s happening, why it matters, and how you can take advantage of it if you’re thinking about buying a home this year.

Why New Homes Usually Cost More

Historically, new construction has almost always carried a premium price tag. And it makes sense—when you buy new, you’re getting fewer maintenance issues, brand-new appliances, and designs tailored to today’s lifestyle. Unlike homes built in the 1950s or 60s, new builds often come with smart layouts, open floor plans, and energy-efficient features. On top of that, buyers often get to customize finishes and upgrades to fit their taste.

It’s just like cars: the brand-new model straight off the dealer’s lot almost always costs more than a used version. That’s been the rule of thumb in real estate, too—until now.

The Numbers Don’t Lie

In June, the median sales price for a newly built home was $407,200. Compare that to existing homes, which were about $28,000 higher. That’s a 6.5% discount—the largest price inversion in more than 25 years.

By July, the gap narrowed slightly to $19,000 (about 4%), but that still represents a significant savings compared to historical norms. In fact, July marked the fourth consecutive month nationwide where new homes were cheaper than existing ones—a stretch we’ve never seen before.

Why Is This Happening?

There are several factors driving this shift:

• Pricing trends: New home prices peaked in late 2022 and have drifted downward. Meanwhile, resale prices have continued climbing, hitting record highs in 2024 and early 2025.

• Builder incentives: This is the big one. Builders are offering massive perks that don’t even show up in median price data. We’re talking mortgage rate buy-downs, closing cost credits, and even design center upgrades worth tens of thousands—or in some cases up to $200,000.

• Inventory pressure: Builders are sitting on more than 9 months of new home supply, compared to just under 5 months for resale. They simply can’t afford to wait—they need to move inventory fast, so they’re pricing aggressively and negotiating hard.

On the other hand, most individual sellers only have one home to sell. If they don’t get their dream price, many are just pulling listings off the market instead of cutting prices. That standoff has kept resale values sticky, even as affordability worsens.

What It Means for Buyers

Here’s the bottom line: for the first time in decades, you can buy a brand-new home for less than an older one. And when you factor in builder incentives, the savings get even bigger.

Think about it—moving into a home with brand-new appliances, modern finishes, and fewer maintenance headaches, while also getting cash credits and rate buydowns? That’s a deal buyers simply didn’t see in past markets.

I’ve personally negotiated deals where my clients received well over $200,000 in builder credits on quick move-in homes—properties available for occupancy within 30 to 90 days. These aren’t dirt lots that take a year to build—they’re standing homes that builders are eager to sell.

Final Thoughts

This is a unique moment in housing history, and it won’t last forever. Either resale sellers will eventually cut prices, or falling mortgage rates will restore demand and bring buyers back into the market at today’s price levels.

But right now, if you’re house hunting, don’t overlook new construction. It may be the smartest, most affordable move you can make in 2025.

Reach out to learn how we’re helping our new construction clients and negotiating with builders to get the very best deals available today.