The cooling housing market is catching up with new construction as freshly built homes , once seen as more resilient, are now seeing steep price drops in cities across the South and West
The housing market downturn is beginning to bite even in areas once thought insulated from falling prices: newly built homes.
Traditionally, new construction has carried a premium over existing houses, with higher costs tied to modern amenities, labor, and rising material prices. But fresh data show that the dynamic is shifting.
Realtor.com reports that in June, the median listing price for new builds dropped year-over-year in 30 of the nations largest metro areas, with the steepest declines in the South and West. It comes as a grand six-bed manor surrounded by one acre of walled gardens is on sale for just $201k.
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The housing market has cooled modestly in 2025, said Danielle Hale, chief economist at Realtor.com. But the extent and persistence of rebalancing really varies across the country.
Nationally, the median listing price for a new home in the second quarter of 2025 was about $450,000, down from $512,200 during the same period last year.
Analysts attribute the declines largely to inventory levels, which remain elevated in fast-growing southern and western cities.
In Little Rock, Arkansas, new-build prices sank 15.6% year-over-year, the largest decline recorded. Austin, Texas, saw an 8.5% drop, while Wichita, Kansas, fell 7.9%. In Jacksonville, Florida, prices dipped 7.8%, and in Cape Coral, Florida, they slid 7.4%.
After years of intense competition, its starting to feel more balanced, especially in the South and West, said Gary Ashton, founder of The Ashton Real Estate Group of RE/MAX Advantage.
Its not a buyers market yet, but were headed in that direction.
Those same regions were at the center of a pandemic-era housing boom, fueled by remote workers relocating in search of affordability and space.
In cities such as Austin and Miami, developers rushed to keep pace, fast-tracking permits and flooding the market with new construction. Now, demand is cooling, leaving too many homes chasing too few buyers.
In Austin, the surge of newcomers once drove prices to dizzying heights. But as interest wanes and affordability erodes, developers have little choice but to cut prices. Miami faces its own challenges: soaring homeowners association fees and rising insurance costs that are discouraging would-be buyers.
Despite the pressure in the South and West, new homes in many parts of the Midwest and Northeast remain more expensive than older properties, with fewer signs of significant discounts. Limited inventory there continues to keep demand strong enough to prop up prices.
Sellers nationwide are nevertheless under growing strain. A separate Redfin report found that from January through March 2025, 44.4% of home sales included concessions such as covered closing costs, repair credits, or mortgage-rate buydowns. Some sellers even offered to cover HOA fees to close deals.
These incentives, layered on top of price negotiations, underscore how tough the market has become for anyone trying to unload a property.
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