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The gap between new and existing home prices is narrowing, according to the National Association of Home Builders (NAHB).
“Homebuilders are committed to ensuring everyone who values homeownership has the opportunity to attain a safe, affordable home,” says NAHB chairman Buddy Hughes, a homebuilder and developer from Lexington, North Carolina. “High construction costs and labor shortages continue to be challenges for the residential construction industry.”
In the first quarter of 2025, an NAHB analysis of data from the U.S. Census Bureau and National Association of Realtors revealed the median price for a new single-family home sold was $416,900, only $14,600 more than an existing home sale price. The average difference between new and existing homes over the last five years was $26,700.
The smaller gap is caused by tight inventory forcing prices up for existing homes and homeowner hesitancy to sell their homes due to increased interest rates.
Homebuilders are adapting to these changes by building on smaller lots, constructing smaller homes and offering incentives, according to the NAHB/Wells Fargo Housing Market Index (HMI).
