New Home Median Price Falls to Lowest Level in Nearly Five Years

The median new construction home sold for $387,400 in March, the lowest level in nearly five years. 2 percent in the last year even as older homes continued to appreciate slowly. 3 percent from a year earlier.

New homes sold for between $300,000 and $400,000 make up the largest segment of the market. Sales of new homes priced below $300,000 now make up 18 percent of the market, up from 14 percent in 2023. Price cuts and smaller floor plans are bringing affordability-stretched buyers back to new construction.

"We know that there's pent-up demand for home buying, and I think that builders have the tools to be able to bring some of those buyers off the sidelines," said Odeta Kushi, deputy chief economist at First American. Builders have slashed prices in high-supply markets in the Southeast and Mountain West while offering simpler finishes on smaller homes.

Typically new construction commands a premium over older homes, but that gap has narrowed and in some areas reversed.

Com. 7 percent less. In San Antonio, prospective buyers have multiple builders to choose from, making price cuts, interest rate buydowns and closing cost assistance common.

"I have seen a lot of these homes reduced pretty drastically in price," said Brock Bremmer, a real estate agent there who does much of his business in new construction. Bremmer has also seen builders go smaller to keep prices lower. A few years ago a new 1,600-square-foot home in the area usually had three bedrooms and two bathrooms.

Many new 1,600-square-foot homes in San Antonio now have a fourth bedroom, and some builders offer two-bedroom homes with floor plans as small as 800 or 900 square feet. , has watched builders expand aggressively in the outer suburbs of the Minneapolis-St. Paul market while inventory of older homes lagged.

Purchasing an existing home usually requires beating out multiple offers. "If you take a $500,000 existing home, more than likely in our market, there are going to be multiple offers, which is going to drive that price up," Archie said. One client received $15,000 off the list price plus $5,000 for closing cost assistance or an interest rate buydown on a new home.

Tough affordability conditions, higher mortgage rates and gas prices are still giving some buyers pause, and measures of homebuilder confidence remain low. "I don’t think it’s time to organize the ticker tape parade yet," said Allan Merrill, the CEO of Beazer Homes.

"But I think we don’t have enough homes in this country, and so when we get any alignment of confidence, a break in affordability, the surprises are likely to be to the upside in terms of demand," Merrill added.

Separately, Péter Magyar won the election to become Prime Minister of Hungary last month. He will be sworn in as Prime Minister on May 9th in a ceremony on the bank of the Danube River. 3 million people, roughly equivalent to a third of Hungary’s population.