Housing and City Growth Secretary Scott Turner discusses easing rules to spice up provide, exploring under-utilized federal land and responses to rent-freeze proposals.
The affordability hole between shopping for newly constructed houses and present houses declined within the third quarter as builders look to capitalize on the uptick in demand with incentives.
The value per sq. foot for a new-construction house is decrease than the worth for an present residence within the South and West specifically, based on Realtor.com’s third quarter report on new development.
Each the South and West have extra provide of latest development and better value reductions, whereas the Northeast and Midwest have fewer new-construction houses listed with extra modest value reductions.
“Builders have a superb quantity of spec stock that they’re making an attempt to maneuver proper now because the market cools down each seasonally and by way of value and gross sales progress,” mentioned Joel Berner, senior economist at Realtor.com. “Fast move-in stock is available, and builders are slicing costs and providing incentives to get it offered.”
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New residence affordability is rising within the South and West amid a rise in stock and extra incentives for patrons. (Matthew Busch/Bloomberg/Getty Pictures)
Housing stock within the South and West has principally returned to pre-pandemic ranges as a consequence of builders delivering new development, whereas newly constructed houses have a single-digit value premium and all houses have increased charges of value reductions than different areas, the report discovered.
Against this, new development is at a premium within the Northeast and Midwest, and people areas had among the hottest and most seller-friendly housing markets within the nation.
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Traditionally, patrons of latest houses had bigger down funds than these of present houses, although that dynamic has shifted. (Mario Tama/Getty Pictures)
The median value per sq. foot for brand new builds was $200 within the South and $292 within the West, whereas it was $353 within the Northeast and $227 within the Midwest, based on the Realtor.com evaluation. For present houses, these figures have been $204 within the South, $320 within the West, $271 within the Northeast and $168 within the Midwest.
“Now, new-builds are price-competitive with present houses and really extra inexpensive on a per-square-foot foundation,” Berner mentioned. “In a market the place affordability is the highest concern, new houses are priced to promote, and so they additionally provide engaging financing that lowers the burden of the 2 most onerous components of shopping for a house: the down cost and the month-to-month cost.”
Worth reductions are at an all-time excessive for newly constructed houses, with 15.1% of listings decreasing their costs within the third quarter of 2025, the report discovered. These reductions are much less frequent in areas with extra constrained housing markets.
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Incentives like mortgage fee buydowns and below-market mortgage charges have gotten extra frequent for patrons of newly constructed houses. (iStock)
Within the South and West, the place there’s extra provide, value reductions are extra frequent, with 16.6% of latest builds within the West and 15.9% of these within the South having their costs lowered. Within the Northeast, simply 7.8% of latest builds had value reductions, and simply 12.2% within the Midwest, based on the report.
A current Realtor.com research discovered that mortgage fee buydowns and below-market mortgage charges are a standard promotion to draw patrons to new development given elevated mortgage charges.
Within the third quarter of 2025, the report confirmed that the common 30-year mortgage fee on the deed of an present homebuyer was 6.26% – whereas for brand new residence patrons the common 30-year fee was 5.27%. Mortgage charges being 99 foundation factors decrease for brand new residence patrons within the third quarter is a bounce from the prior two quarters, which have been 51 and 54 foundation factors, respectively.
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Down funds on new residence purchases are additionally lowering regardless of new-construction patrons traditionally making bigger down funds than these shopping for present houses.
In the latest quarter, new residence patrons put down 15.7% of the acquisition value whereas patrons of present houses put down 17.8%. For comparability, within the third quarter of 2022, new residence patrons have been placing down 18.3% and present residence patrons put down 17.2%.
