The strangest thing about today’s housing market isn’t prices—it’s which homes are cheaper

One of the many mysteries surrounding today’s housing market in the United States is why existing homes are now more expensive than new ones. Traditionally, it’s the other way around.

A look at the June housing numbers showed that the medium sale price for an existing home was $441,500, while new ones sold for $401,800, according to Forbes. Do that math and that means brand-new homes were 9% cheaper, than old, or “existing” ones—a new record.

According to U.S. Census Bureau data, the medium price for a new home sold in July 2025 was 0.8% below June 2025 prices, and 5.9 percent from July 2024. So, not only are new builds less expensive, they are now selling at a sharp discount.

That’s especially true in some of the weakest markets, where new construction prices are falling the fastest. (For example, in Little Rock, Arkansas, the $321,520 median listing price was down 15.6% from a year ago; in Austin, Texas, it’s down 8.5%); Wichita, Kansas, it’s down 7.9%; and in Jacksonville and Cape Coral, Florida prices are down 7.8% and 7.4% respectfully.)

Why are new homes cheaper than old homes?

There are a few other reasons for the trend.

“The affordability difference goes beyond sticker price, too, as many builders are offering incentives like cash at closing or reduced mortgage rates that make a major difference in upfront costs and monthly payments,” Realtor.com senior economist Joel Berner explained.

New homes are also relatively cheaper now because, in an effort to keep costs down, builders are creating new homes with smaller floor plans. And geography plays a role, too, with new home builds more often located in lower-priced markets.

And that brings us to the sellers, themselves, who have low or no mortgages thanks, in part, to rate drops during COVID-19. With little to no incentive to move, home owners are more likely to stay put, and reject an offer to sell, rather than cut prices. Data shows nearly 40% of U.S. owner-occupied housing units in 2023 were mortgage-free, marking a new high.

Factor in with that a huge inventory of unsold new-builds, especially in softer markets like the Sun Belt, and a clearer picture begins to emerge.