Price cuts on new builds outpaced resales, reshaping competition for rate‑weary borrowers
Builders have been more likely than individual sellers to cut asking prices on homes, a shift that underscores how sharply affordability pressures have bitten into demand.
Realtor.com’s latest Quarterly New Construction Insights showed that nearly one in five new listings carried a price reduction in late 2025, edging past discounting on existing homes.
Behind that headline figure sits a market where builders have been unusually quick to adjust.
“New construction has been one of the steadiest parts of the housing market over the past few years, but builders are clearly responding to today’s affordability pressures and higher-levels of existing-home inventory,” said Danielle Hale, chief economist at Realtor.com.
“Nearly one in five new homes cut prices, more than in the resale market for the first time in recent history. This is not just a reflection of regional divergence and where new homes are built; we are seeing builders compete more directly on price to keep sales moving, even as overall new-home prices remain relatively stable.”
Realtor.com data showed 19.3% of new‑construction listings with price reductions in the fourth quarter of 2025, compared with 18% of resale listings nationwide, with cuts concentrated in the South and West.
Nevada, Indiana, South Carolina, Minnesota, North Carolina, New Jersey and Texas all posted above‑average shares of reduced‑price new builds, ranging from roughly 19% to nearly 25%. In several of those states, the share of discounted new homes exceeded even elevated markdowns on existing stock.
New builds, pricing power and product mix
Despite the broader discounting trend, headline prices barely moved. The median listing price for a newly built home stood at $451,128 in the fourth quarter, up just 0.3% year over year, while resale prices were essentially flat.
Newly built single‑family homes were priced about 10.7% above existing single‑family properties, a premium that had been narrowing as builders leaned harder on incentives and list‑price cuts.
Realtor.com’s report also highlighted a twist that mattered for urban borrowers and their lenders. Newly built condos and townhomes now carried a substantially higher premium over existing attached homes, about 30.7%, with nearly one in ten new condos for sale located in high‑cost metros such as New York and Miami, where median listing prices topped $1 million.
By contrast, most new detached homes were clustered in more affordable markets like Houston, Dallas–Fort Worth, San Antonio, Atlanta and Phoenix, where builders could add inventory closer to national medians.
“What we’re seeing is a market where single-family new construction is filling an affordability gap that resale homes increasingly can’t,” said Joel Berner, senior economist at Realtor.com.
“Condos are still playing an important role in certain markets, but they’re skewing more luxury, while detached homes are doing more of the work when it comes to expanding supply.”
Builder incentives, confidence and the mortgage lens
The new wave of price cuts arrived on top of aggressive incentive strategies that already defined the current cycle. The National Association of Home Builders reported that a solid majority of builders continued to rely on discounts and rate buydowns to move product, even as sentiment stayed near multi‑year lows under the weight of high borrowing costs and economic uncertainty.
Meanwhile, some mortgage executives viewed those incentives as distorting local price signals and complicating qualification for borrowers, arguing that inflating contract prices to fund buydowns ultimately made it harder for households to carry the debt.
“New build homes are still priced very high,” Darshit Chokshi, president and CEO of Aequitas Mortgage told Mortgage Professional America.
“Another thing, builders, as we all know, offer incentives to cover closing costs or buy down rates. I think that practice needs to be made illegal, because what they're doing is they're inflating the purchase price to give the same money back to buy down the rates.”
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