Homebuilders are expanding their use of rebates, with nearly 1 in 5 homes having a price reduction by the end of 2025, according to a new analysis from the Realtor.com® economic research team.
In the fourth quarter, 19.3% of new home listings offered price reductions, compared to just 18% of existing homes. This means that, for the first time in recent history, new homes are more likely than pre-owned homes to decrease in value, according to Realtor.com’s Quarterly New-Construction Insights report.
The change suggests that homebuilders are responding more quickly than homeowners as the market shifts to a more buyer-friendly environment, with many individual sellers perhaps more inclined to sell their property than offer a discount.
“New construction has been one of the strongest segments of the housing market for the past few years, but builders are clearly responding to today’s affordability pressures and high levels of existing housing stock,” said Realtor.com’s Chief Economist. Danielle Hale.
Although price reductions are generally concentrated in the South and West, there are exceptions. For example, Indiana, Minnesota, and New Jersey are seeing reduced list prices that exceed the national average.
Other states where the share of discounted listings exceeds the national average include Nevada, South Carolina, North Carolina, and Texas.
“This is not just a reflection of the regional divide and where new homes are being built. We are seeing builders compete directly on price to keep sales moving, as new home prices remain stable,” Hale said.
In the fourth quarter of 2025, the listing price of a newly constructed home was $451,128, up just 0.3% from a year ago, while the listing price of existing homes was flat.
Homebuilders have admitted they are responding to weak demand in a market weighed down by affordability challenges and economic uncertainty.
In a quarterly earnings report in December, homebuilder Lennar reported that its average sales price was $386,000 for homes delivered in the three months ended in November, down 10% from a year ago.
“The current housing market is mired in an affordability crisis, leaving many American families feeling disenfranchised from the traditional promise of upward mobility and home ownership,” said Lennar’s chief executive. Stuart Miller said in a call with investors.
New condos are more expensive than new single-family homes
In the fourth quarter, the median listing price for newly constructed attached properties (including condos and townhouses) was actually higher than the median listing price for new single-family homes.
This was not the case for existing homes, where attached homes were always more expensive than freehold homes, as one would expect due to their average size.
However, real estate developers focus on building condos in high-cost markets, and in densely populated, high-demand markets, resulting in price fluctuations.
For example, about 10% of all new condos for sale in the United States are in the New York City or Miami area, where the median listing price is over a million dollars, the report found.
Meanwhile, new single-family construction is rampant in affordable markets like Houston, Dallas, San Antonio, Atlanta, and Phoenix, where prices are close to the national median.
“What we’re seeing is a market where new single-family construction is filling an affordability gap that can’t sell homes,” said a senior economist at Realtor.com. Joel Berner. “Condos still play an important role in certain markets, but they are replacing luxury, while detached homes are doing a lot of work when it comes to expanding supply.”
