New Homes Now Cost Less Per Square Foot Than Existing Homes Nationwide

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The long-standing assumption that a newly built home automatically carries a premium is breaking down in much of the country.

New construction sold for a median $205 per square foot nationally in July, compared with $212 for existing homes, according to a Zillow analysis released Tuesday. New homes were less expensive on a price-per-square-foot basis in roughly one-third of the major markets Zillow analyzed.

The shift is most pronounced in high-supply markets where builders added aggressively during the pandemic-era housing boom. Austin, Raleigh and Tampa are among the markets where new construction now offers some of the largest relative discounts.

Builders have more inventory to move

Nationally, new homes have sold at a per-square-foot discount to existing homes in 17 of the past 19 months, Zillow found. That is a sharp reversal from 2018 through 2024, when new construction commanded a premium in 77 of 84 months. The premium peaked at $25 per square foot in November 2022.

Supply helps explain the reversal. The Census Bureau put new-home supply at 9.6 months in July 2026, compared with 7.6 months two years earlier and roughly six months in July 2018 and July 2019. Builders facing elevated inventory have greater reason to cut prices, offer mortgage-rate buydowns or use other incentives to move completed homes.

“New homes are the overlooked opportunity more buyers should be thinking about,” Zillow senior economist Kara Ng said in the company’s release. “Buyers who assume new homes are out of their price range may be surprised at what they find.”

The national figures do not mean a new home carries a lower total purchase price. Price per square foot adjusts for home size and mix, and local differences remain substantial. New construction also tends to be concentrated in markets where land is available and development has been strongest.

The Sun Belt tells the clearest story

Austin showed one of the largest gaps: new construction sold for a median $184 per square foot in July versus $228 for existing homes, a difference of roughly 19%. New homes accounted for 31.1% of sales there over the 12 months ending in July.

In Raleigh, new homes sold for $188 per square foot compared with $219 for existing homes, while new construction represented 33.6% of sales. Tampa’s new homes averaged $198 per square foot versus $226 for existing properties.

The pattern is not universal. In supply-constrained markets such as New York, Los Angeles, Miami and San Francisco, newly built homes still carried substantial per-square-foot premiums. Miami’s new construction, for example, sold for $394 per square foot compared with $321 for existing homes.

Nationally, new construction represented 12.6% of home sales over the latest 12-month period in Zillow’s analysis. But the share reached 37.1% in San Antonio and 33.6% in Raleigh, illustrating how much local construction pipelines can reshape buyer leverage.

Affordability pressure is changing the new-home market

The data add another dimension to the affordability story. Builders cannot control mortgage rates, but they can alter product size, pricing and incentives more quickly than individual existing-home sellers. In markets with abundant inventory, that flexibility is increasingly showing up in the price buyers pay for each square foot.

It also creates a competitive issue for existing-home sellers. A resale property is no longer competing only with nearby homeowners; in construction-heavy markets it may be competing against a builder that can reduce price, buy down a mortgage rate or cover closing costs.

For buyers, the comparison still requires more than price per square foot. Location, lot size, taxes, homeowners association costs, construction quality and builder incentives can materially change the economics. But Zillow’s latest numbers show that dismissing new construction as the expensive option can now mean overlooking some of the market’s most aggressive pricing.