New Homes: Bargains of the Sun Belt

SEATTLE – (Realty News Report) – Sun Belt markets with an abundance of new home construction offer the biggest discounts for new homes relative to the price of existing homes, according to a new report.

Buying a new home is now typically a better value than an existing one nationwide, according to a Zillow analysis. New homes sell for a median of $205 per square foot nationally compared to a median of $212 for existing (resale) homes.

That’s a reversal from when new homes commonly sold for more than existing homes from 2018 to 2024. The price-per-square foot premium peaked at $25 in November 2022.

Houston is an exception with new homes selling for slightly more than existing ones in July – $164 PSF for new vs. $161 for existing, according to Zillow.

Over the last 10 years, Houston and Dallas have been either number one or number two in single-family new home construction nationally with other cities far behind.

In markets where construction has boomed, builders are more likely to offer incentives such as upgrades, discounts, and mortgage rate buy downs. That has translated into new homes capturing a greater share of home sales in many markets.

In Houston, new-home sales made up 30.7% of home sales in the last 12 months through July, according to Zillow. That’s up from 24.0% of home sales in 2019 prior to the pandemic.

Nationally, new-home sales comprised 12.6% of the home sales recently, the same as in 2019, according to Zillow.

The markets with the biggest discounts for new homes include:

Austin ($184 PSF for new vs. $228 for existing)
Dallas ($175 PSF for new vs. $195 PSF for existing)
San Antonio ($156 PSF for new vs. $164 PSF for existing)
Raleigh ($188 PSF for new vs. $219 PSF for existing)
Tampa ($198 PSF for new vs. $226 PSF for existing)

“New homes are the overlooked opportunity more buyers should be thinking about. Buyers who assume new homes are out of their price range may be surprised at what they find,” said Kara Ng, senior economist at Zillow. “Where the most new homes have been built, buyers are in the best position to negotiate as sellers have a lot of other homes on the market to compete with.”

In markets where new construction is more scarce, new homes often commanded premiums. Places where new homes cost more than resale homes include: