Looking for a house under $300,000? Here's why newly built homes may offer the best deals.

By Aarthi Swaminathan Home builders are cutting prices on new homes, offering buyers some relief from high costs The median price of a newly built home in October was nearly $23,000 less than that of a previously owned home. Buying new doesn't always cost more: For the past five months, newly built homes in the United States have been consistently cheaper than previously owned properties. Historically, new homes have been more expensive than existing homes, but that dynamic has flipped as home builders aggressively discount their new homes to get them sold. Since 2007, when the National Association of Home Builders began tracking prices, new homes have typically been more expensive. But starting in 2024, prices of existing homes started to shoot up and the gap closed. That trend became even more pronounced starting in June 2025, when new-home prices fell. That month, the median new home was $409,200, which was $23,500 less than an existing home. Since then, new homes have consistently been cheaper than existing ones. In October 2025, the latest month for which the government has data on new-home sales, the median price of a newly built home fell to $392,300, or $22,600 below the median price of an existing home, which was $409,200. A quarter of the new homes purchased in October were priced under $300,000 as builders cut prices to boost sales, according to Ben Ayers, a senior economist at Nationwide. That share has been growing: In October 2024, only 14% of new homes sold were under $300,000. The fact that new homes are getting cheaper is likely to be a welcome development for buyers at a time when homeownership has become increasingly unaffordable for many Americans. "Affordability is the main constraint in the housing market currently, and builders are doing their part to bring more buyers into the fold by delivering low-priced new inventory to the market in a way that the existing home segment simply can't," Joel Berner, a senior economist at Realtor.com, said in a statement. (Realtor.com is operated by News Corp subsidiary Move Inc.; MarketWatch publisher Dow Jones is also a subsidiary of News Corp.) To address persistently high housing costs, Democrats and Republicans have proposed various policies, such as increasing housing supply by building more or lowering mortgage payments with a 50-year mortgage. Most recently, President Donald Trump said he was directing Fannie Mae and Freddie Mac to buy up $200 billion in mortgage-backed securities, an announcement that briefly pushed the 30-year mortgage rate down to 5.99%. The 30-year rate had inched back up to 6.07% as of Tuesday, according to Mortgage News Daily. "Combined with lower mortgage rates, it is an especially attractive time for buyers to be searching for a newly built home," Realtor.com's Berner noted. For that reason, "we expect home sales to get a boost over the first half of 2026 from the sudden drop in mortgage rates and the Trump administration's efforts to lift demand for single-family housing," Ayers at Nationwide said in a statement. With the inventory of completed new homes for sale at the highest level since 2009, "we see little upside for single-family housing starts until more of that supply is sold," Nancy Vanden Houten, lead economist at Oxford Economics, said in a statement. Builders are responding quickly to the current environment in which buyers remain on the sidelines, unlike homeowners, who are looking to sell, Berner said. "Builders are more motivated sellers than regular homeowners, many of whom are reluctant to cut prices and would rather delist their home than sell below their target," he said. Plus, "builders continue to deliver smaller and more affordable new homes in more affordable areas," he added. New-home sales rose nationally by 18.7% in October from the same month a year ago, government data showed, but in the South, sales rose by about 42.1%, making it the strongest-performing region for home builders. -Aarthi Swaminathan This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 01-13-26 1427ET