New homes are now the cheapest they have been since the pandemic, as stubbornly low demand continues forcing homebuilders to offer hefty discounts in an attempt to encourage reluctant buyers to close a deal. Last month, the median sales price of a new home fell to $393,800, down 2.3 percent in June, when it was $403,100, and down 0.9 percent from a year earlier, when it was $397,300, according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development.
It is the lowest price new homes have had since July 2021, according to real estate listing website Realtor.com. Considering home prices have risen by roughly 30 percent nationwide since 2019, this is great news for homebuyers. Not only do new homes now cost the same as they did during the pandemic home-buying frenzy, but they are cheaper than existing homes, which represents the majority of the listings on the market.
The median existing home price was $434,100 in July, much higher than the price of new homes the same month. That is a stunning reversal of historical norms, and quite an advantageous one for buyers at that, especially considering that new homes come with the promise of not needing costly repairs that existing homes might require. You would think buyers are taking advantage of this situation.
But that is the catch: new home prices are falling exactly because Americans are not buying them and supply remains much above demand levels. Lower prices should encourage homebuyers to leave the sidelines of the market they have been confined to by high borrowing costs and skyrocketing home prices since the pandemic. But that has not been the case.
Sales of new single-family homes were at a seasonally adjusted annual rate of 607,000 in July, according to official data, down 10.5 percent from June (678,000) and 6.3 percent from a year earlier (648,000). Americans’ reluctance to buy new homes corresponded to a rise in inventory levels. According to Census Bureau data, the seasonally-adjusted estimate of new homes for sale at the end of July was 488,000, up 1.9 percent from June (479,000) and 1.6 percent below July 2025 levels (496,000).
The reason why new home sales are not picking up is the same reason why existing-home sales are also falling: the ongoing affordability challenges caused by still-rising home prices and once-again-climbing mortgage rates, and Americans’ general concerns with the cost of living. As of the week ending on August 20, the national 30-year fixed-rate mortgage averaged 6.65 percent, according to Freddie Mac data—a far cry from experts' expectations at the beginning of the year that 2026 will bring averages at or below the 6 percent mark. The median sale price of existing homes was still rising last month year-over-year, and rose from $425,700 in July 2025 to $434,100 in July 2026, according to the latest data by the National Association of Realtors (NAR).
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