Rising New-Home Inventory Gives Builders an Edge Over Resale Market

The single-family housing market has been challenging for home builders to navigate, but the new-home segment offers distinct advantages compared to the resale market. According to housing market platform Realtor.com’s New Construction Insights Q-3 2025 Report, builders have a leg up on the existing homes by offering more compelling sales incentives, and in many cases, better prices.

An increase in new-home inventory is creating better deals for buyers

Inventory has finally caught up after being depleted during the pandemic housing boom. In October alone, active new-home listings grew by 15.3% year-over-year, marking the 24th straight month of gains.

At the same time, the median list price for new homes grew by just 0.2% year-over-year to $451,337. However, in regions where inventory is even higher—such as the South and West—prices are much lower.

On a per-square-foot-basis, new homes in the South and West are more affordable than existing homes, says the report. For instance, in the South, new homes are pricing at an average of $200 per square foot, while existing homes are listing at $204 per square foot. Similarly, in the West, new homes are priced at a average of $292 per square foot while existing homes are running $320 per square foot.

Buyers also benefit from incentives when shopping in the new-home market

On top of lower sales prices, builders also can offer better sales incentives than resales. Reduced or buy-down mortgage rates are the most common incentive, according to the report. In Q-3, the average 30-year mortgage rate listed on the deed of an existing home was 6.26%, but for a new home, the average 30-year rate was 5.27%.