**Sources (with links) used for this article are compiled at the bottom. These sources would also be good for further reading/research into the topic.
There’s a clear trend in real estate right now... more homebuyers are flocking to newly built houses. If you’re a real estate agent or MLO, you’ve probably noticed it too. At first glance, you might think people just want that brand-new kitchen or modern floor plan. And sure, the fresh paint and new appliances are nice. But the real reason behind this shift comes down to something simpler... buyers are finding better deals on new construction. Let’s break down what’s happening in the market and how this knowledge can help you guide your clients.
What’s Driving the Shift to New Construction?
Buyers are turning to new construction in record numbers. In fact, sales of newly built homes recently hit their highest level in over two years. This surge isn’t just because people love new. It’s because the market conditions are making new homes a smart choice right now. There are two big factors at play.
1) Limited Resale Inventory
Many existing homeowners are “locked in” with ultra-low mortgage rates from a few years ago. They’re reluctant to sell and give up those low monthly payments, so fewer existing homes are up for sale.
We had a couple of years of historically tight inventory because owners didn’t want to lose their 3% mortgages. Although more folks are starting to list their homes now as rates stabilize a bit, the supply of resale homes is still nowhere near enough for all the buyers out there.
2) Builders Stepping in with New Homes
Home builders saw the shortage of resale homes and ramped up construction to meet demand. As a result, there are more new homes available now than we’ve seen in years. At one point in the last couple of years, about one in every four homes for sale was a new build, much higher than the typical one in six before the pandemic. Builders essentially filled the gap when the resale market was dry, giving buyers options they wouldn’t have otherwise.
With more brand-new houses on the market and fewer old ones to choose from, it’s no surprise buyers are gravitating to new construction. But availability isn’t the only reason... price and affordability are huge factors, too.
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Builders Are Sweetening the Deal for Buyers
Having more new homes on the market has put builders in a position where they really need to attract buyers. To do that, they’re rolling out incentives and deals that we don’t typically see in a hot market. It might sound crazy, but it’s a bit like new homes are “on sale” right now.
New home sales have surged to the highest levels in over two years, showing how demand for newly built homes has jumped lately. Builders are responding by offering incentives to entice buyers, effectively putting many new houses “on sale.”
Think about what your buyer clients dream about when it comes to affording a home... lower monthly payments, a good price, and help with upfront costs. Builders are offering exactly those kinds of perks.
1) Mortgage Rate Buydowns
Many builders will pay to lower the buyer’s interest rate, at least for the first few years or even for the life of the loan. That means a noticeably smaller monthly payment for the homeowner. In an era of higher interest rates, this is a big draw.
2) Price Cuts
Some builders have reduced base prices on new homes to lure buyers, making that brand-new home more attainable. One industry analyst noted that builders have cut prices about 13% from their peak in recent months.
3) Closing Cost Assistance and Upgrades
It’s common to see offers of help with closing costs, free upgrades like better appliances or countertops, or added perks in certain communities. These extras can save a buyer thousands of dollars.
Widespread Deals
The best part? These deals aren’t just at one or two developments.... they’re widespread. Nearly 6 in 10 new home communities are currently offering some type of incentive on homes that are yet to be built, and over 75% of communities are offering incentives on “quick move-in” homes (houses that are already completed and ready). In other words, if your client walks into a builder’s model home today, there’s a good chance they’ll be offered a bonus to buy now.
Inventory & Competition
Builders are doing this because they have inventory to sell and competition for buyers. As one market watcher put it, builders are adjusting to the current market reality – they’ve cut prices and are tossing in generous rate buydowns on top.
They’re highly motivated to make a deal. For buyers who felt priced out of the market in the past year, these offers can be a game-changer. A lower price and a lower effective interest rate can bring homeownership back within reach for many folks who were on the sidelines.
Not as Pricey...
Another interesting twist: new construction isn’t as pricey as it used to be relative to existing homes. Nationwide, the median price for a new home has stayed pretty flat over the last year or two, while prices for existing homes have continued to inch up. In fact, when you compare cost per square foot, new homes are slightly cheaper on average than resale homes right now.
That’s not something we could have said a few years back. The typical “premium” for buying new (the extra you’d normally pay for a brand-new home) has shrunk a lot – one report puts it at only about 8% higher than the price of an equivalent older home, the smallest gap on record. For once, buying new doesn’t mean paying an extreme premium, especially considering the savings from those builder incentives.
All of this adds up to new houses feeling like a good bargain to buyers. They have more choices, and they might snag a deal that gives them a better monthly payment than an older home would. As a real estate professional, it’s almost like we’re seeing new construction homes become the affordable option in certain markets.
More New Homes, More Options (Especially in Certain Areas)
It’s worth noting that this trend isn’t uniform everywhere – it varies by region. Overall, there are more new homes for sale across the country than we’ve seen in a long time, which means your buyers likely have more options than they realize. Whether they want a turnkey move-in-ready home or to customize a build from scratch, the inventory is better now than it has been in years.
Some regions stand out. The South and the West currently have especially high levels of new construction inventory. For example, states like Texas, Florida, and Utah have a lot of new developments, and builders there are often even more eager to negotiate and make a deal.
If you’re working in one of these high-construction areas, you might find builders throwing in even more freebies or price cuts just to stand out from the competition.
On the flip side, in parts of the Northeast or Midwest where new builds are less common, new construction can still carry a bigger price tag and fewer deals. But nationally, the scales have tilted in favor of new-build buyers in a way we haven’t seen in a long time.
The key point is that buyers have choices. After years of skimpy housing inventory, walking into a sales office and seeing multiple brand-new homes available (sometimes with price tags negotiable) is a refreshing change for our clients.
It gives them an alternative path to homeownership if the hunt for an existing home isn’t panning out. As their agent or loan officer, being aware of these options means you can open more doors – literally and figuratively – for your clients.
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This Opportunity Won’t Last Forever
Now, before we start thinking the new construction market is an endless buffet of deals, a word of caution: this window of opportunity may be temporary. Builders are very aware of supply and demand. They don’t want to end up with too many unsold homes. In late 2025, we’re already seeing builders pump the brakes on new projects to avoid overshooting the market.
Slowed Down
Recent data shows that builders have slowed down on starting new houses. Building permits and housing starts are down from a year ago, and the number of single-family homes under construction has dropped to the lowest level in almost five years.
In short, the construction pipeline is narrowing as builders focus on selling what’s already built. A Redfin report even noted that some builders, facing slower buyer traffic, have scaled back so much that they’ve laid off workers in certain areas, something virtually unheard of during the frenzy a couple of years ago.
What Does this Mean for the Market?
It means the current surplus of new homes will likely shrink. In fact, the share of listings that are new construction has begun to decline as more resale homes trickle onto the market and builders hold off on breaking ground on the next development.
The big builder incentives we’re seeing now are there because builders need to move existing inventory. Once that inventory gets cleared out and they’ve scaled back construction, the leverage will shift. Fewer new homes available could mean fewer deals (and possibly firmer prices) down the road.
Act Sooner Rather Than Later
Many experts are advising buyers interested in new construction to act sooner rather than later. Right now, there’s still a relatively large pool of new homes to pick from, but it’s starting to get smaller. We can already see that the “best time in years” to buy a new home might be right now, not a year from now.
As an agent or MLO, it’s important to convey this context to clients. Of course, we never want to pressure anyone into a purchase they’re not ready for. But if someone is on the fence and the only thing holding them back is hope for a better deal later, you might gently remind them that today’s combination of abundant choice and builder bargains is unusual, and it likely won’t be as good next year if the market rebalances.
How Real Estate Agents and MLOs Can Help Their Clients
Understanding why so many people are buying new construction is half the battle. The other half is using that knowledge to guide your clients wisely. Here are some ways you can help your buyers make the most of this trend in a friendly, proactive way.
1) Introduce New Construction as an Option
Clients who have been frustrated with the limited resale inventory or constant bidding wars might not even be thinking about new builds. Don’t hesitate to say, “Hey, have you considered looking at some new construction communities? Builders are offering some great deals right now.”
Explain that it’s not just about getting a brand-new home – it’s about potentially getting a better financial deal in the current market. Sometimes buyers assume new means expensive; you can share that actually, new homes might be a bargain right now relative to old ones, thanks to price cuts and incentives.
2) Be the Guide in the New-Home Process
Remind your clients that if they walk into a builder’s model home or sales office, they should mention that they have an agent (you) or bring you along. Builders are happy to work with buyer’s agents, and having you there ensures someone is looking out for the client’s best interests.
As the market is now, comparing incentives from different builders can be a huge task – one builder might offer a better rate buydown, another might give more in closing costs. Position yourself as the person who can help compare those offers and negotiate on the buyer’s behalf.
For instance, if Builder A is offering a 3% credit and Builder B is offering free upgrades, you can help your client weigh which is more valuable for their situation, or even ask Builder A to match terms to win the client’s business.
3) Stay on Top of Local Builder Deals
Make it part of your routine to keep an ear to the ground about what builders in your area are doing. Maybe a builder just started a promotion for the last quarter of the year (free appliance package, or $10,000 off for contracts signed this month). The more you know, the more you can match the right client to the right opportunity.
If you’re an MLO, you might connect with builders’ preferred lenders or sales reps to understand the financing specials on offer. This way, when a client says, “We’re thinking about that new subdivision across town,” you can respond with, “Great, I hear they’re offering a 2-1 rate buydown and covering closing costs – that could save you a lot. Let’s verify the details and factor that into your budget.”
4) Educate Clients on the Process Differences
Buying new construction can feel a bit different from buying an existing home. There might be longer wait times if a home is not completed yet, or the contract might be a builder’s contract instead of the standard resale contract.
Prepare your clients for those differences in a calm, reassuring way. For example, if the home won’t be finished for six months, an MLO can discuss rate lock options or the possibility of rates changing, and the agent can discuss what inspections or warranties come with a new home.
Set expectations that new builds might involve selecting finishes or doing walkthroughs at different stages – but also highlight the upside: no unexpected repair costs and a warranty for peace of mind.
5) Leverage the Current Market Timing
If you have clients who are able to buy now but are undecided, politely share that this moment is unique. You might say something like, “I never thought I’d see the day when buying a new construction home could actually save you money, but here we are. Builders have a lot of inventory now, but they’re starting to dial back.
So if getting a brand-new home with a lower rate and some closing costs covered sounds good, this is a window of opportunity. I just want you to have all the facts while you’re making your decision.”
6) Collaboration
Lastly, collaboration between agents and MLOs is key in this landscape. As an agent, if your buyer is interested in new construction, loop in their loan officer early. There may be builder incentives that involve the financing (for example, a builder offering a year of paid HOA fees or a rate buydown that the lender needs to structure).
As an MLO, be proactive in asking your buyer, “Are you looking at new builds? I can help you crunch the numbers on those builder incentives to see how good of a deal it really is.”
Sometimes you might even coordinate with the builder’s preferred lender or negotiate who handles the buydown.
TLDR....
More people are buying new construction homes now because the market has created a perfect opening for it. There’s more supply of new houses, fewer resale choices, and builders are bending over backwards to make these deals attractive.
As a result, buyers can often get into a brand-new home and get a break on the price or the monthly payment. But this situation won’t stick around forever... builders are already pulling back on how much they build, and the generous incentives will likely fade as the excess inventory gets bought up.
For real estate agents and MLOs, staying on top of this trend means you can keep your clients informed and confident. Whether it’s guiding a first-time buyer to a sweet deal on a new townhouse or helping a move-up buyer realize that a new build might actually fit their budget, your knowledge is a powerful asset.
The market is always changing, and right now it’s giving us an opportunity to help clients in a new way. So go ahead and talk about those model homes and builder promos – your clients will appreciate that you’re looking out for their best options.
Sources
Recent housing market analyses and industry reports on new construction trends:
These highlight the surge in new-home sales, the prevalence of builder incentives, and the current market dynamics that have made new construction especially appealing to buyers this year.