Whether you’re shopping for a car, computer, or clothes, buying used tends to cost a lot less than buying new—except when you’re buying a house in 2025.
According to the latest Census data, the median price of a new home in the US is $401,800. That’s $33,500 less than you’ll pay for an existing home, which costs $435,300, according to the National Association of Realtors.
“This marks a significant inflection point in the housing market, reversing the historical trend where new construction commanded a premium,” says Ali Wolfe of housing data firm Zonda. “The shift, which began during the pandemic with a narrowing of the price spread, has fully materialized over the past three months.”
This rare role reversal emerged because a glut of new homes has entered the market just as high mortgage rates have sidelined many buyers. As a result, builders’ unsold finished inventory has hit a 16-year high, forcing 66% of them to offer incentives like mortgage rate buydowns—the highest share in five years, according to the National Association of Home Builders.
These deals have not gone unnoticed by real estate investors, many of whom have switched gears from flipping old homes to buying new ones as rentals. Aside from the cheaper purchase price, new homes also boast lower upkeep costs.
“The new-construction rental properties we’ve invested in have a maintenance budget typically coming in at 1% of the value or less, compared to as high as 5% for older rental properties,” says Nathan Miller, founder of Rentec Direct. “For a $350,000 property, that can be as much as $14,000 saved per year. You can imagine how quickly that adds up.”
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And even if the HVAC does break, that’s okay, since most new homes come with a warranty.
“The reason we’ve shifted from rehabbing to buying new homes is that we know a new home will be under warranty for a while,” says Jason Hull at J&J Cash Home Buyers, who has purchased three brand-new builds since the end of March. “This was good for us, as an AC unit was defective, and we’ve already made a claim.”
Jacob Naig, who’s purchased two new constructions in the past 18 months (one a duplex), adds that he negotiated some sweet extras that amped up his savings. “I got a 2-1 mortgage rate buydown, negotiated $5k in closing cost credits, and for the duplex I got an appliance package upgrade, garage door opener install, and a landscaping allowance,” he says. “These concessions count for more than many buyers realize, as they not only eliminate cash outlay but also the time and logistical costs involved in sourcing these items post-closing.”
In addition, new builds can get rented faster. “I was able to obtain occupancy within two weeks of listing [because] I had marketed them as ‘never lived in,’ which always stands out online,” Naig adds.
Although the price of new homes versus old will vary by market, make sure to do the bottom-line math rather than focus solely on the sticker price.
“Integrate maintenance estimates, energy savings, occupancy rates, and the completion attractiveness of the tenants into your calculations,” says Naig. “New construction is an easier way for folks looking to invest passively.”
Curious about the best places to buy new constructions? Check out the top towns here.