Nearly 1 in 5 New Homes Is Selling at a Discount as Homebuilders Step Up Price Cuts

Homebuilders are expanding their use of discounts, with nearly 1 in 5 new homes carrying a price cut in late 2025, according to a new analysis from the Realtor.com® economic research team.

In the fourth quarter, 19.3% of listings for new builds offered price reductions, compared to just 18% of existing homes. This means that, for the first time in recent history, new homes were more likely than previously owned homes to carry a price cut, according to the Realtor.com Quarterly New-Construction Insights report.

The shift suggests that homebuilders are responding more rapidly than homeowners as the market shifts into more buyer-friendly territory, with many individual sellers perhaps more inclined to delist their property than offer a discount.

“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,” says Realtor.com Chief Economist Danielle Hale.

Although price reductions are generally concentrated in the South and West, there are some exceptions. For example, Indiana, Minnesota, and New Jersey are seeing price-reduced listings that exceed the national average.

Other states where the share of price-reduced listings exceeds the national average include Nevada, South Carolina, North Carolina, and Texas.

"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,” says Hale.

In the fourth quarter of 2025, the median listing price for a newly built home was $451,128, up just 0.3% from a year earlier, while listing prices for existing homes were essentially flat.

Homebuilders have acknowledged that they are responding to weak demand in a market that is burdened by affordability challenges and economic uncertainty.

In a quarterly earnings report in December, homebuilder Lennar revealed its average sales price was $386,000 for homes delivered in the three months that ended in November, down 10% from a year earlier.

"The current housing market is entrenched in an affordability crisis, leaving many average American families feeling excluded from the traditional promise of upward mobility and homeownership," Lennar CEO Stuart Miller said on a call with investors.

New condos are more expensive than new single-family homes

In the fourth quarter, the median listing price for newly built attached properties (including condos and townhomes) was actually higher than the median listing price for new single-family homes.

This was not the case for existing homes, where attached homes remained significantly less expensive than free-standing homes, as one would expect due to their smaller typical size.

However, homebuilders are concentrating condo construction in more expensive markets, and in denser, high-demand areas within markets, resulting in the price inversion.

For example, nearly 10% of all the new condos for sale in the United States are in the New York City or Miami metro areas, where the median listing price is well over a million dollars, the report found. 

Meanwhile, new single-family construction predominates in more affordable markets such as Houston, Dallas, San Antonio, Atlanta, and Phoenix, where prices are closer to the national median.

“What we’re seeing is a market where single-family new construction is filling an affordability gap that resale homes increasingly can’t,” says Realtor.com senior economist Joel Berner. “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.”