When it comes to the current housing market crisis, even new builds cannot escape the wreckage.
One third of housing markets across the US are experiencing price drops year over year, and now, a group of homes that once seemed immune is feeling the pressure.
Historically, newly constructed homes have been more costly than pre-existing houses due to expensive modern amenities, rising material prices and labor expenses.
But Realtor.com reported that in June, the year-over-year median listing price for new builds dropped in 30 of the largest US metro areas, particularly in major southern and western cities.
‘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.’
The median listing price for a new home in the second quarter of 2025 was about $450,000. It was $512,200 during the same period in 2024.
Experts have said the price drops come down to inventory levels, which vary across the country.
In June, the year-over-year median listing price for new builds dropped in 30 of the largest US cities, particularly in the South and West
Prospective buyers can find deeper price cuts in the South and out West because of increased inventory.
Conversely, there are fewer homes for sale in the Midwest and Northeast – meaning most in those regions have not yet been forced to cut prices as demand still outweighs supply.
Prices for newly built homes fell the most year-over-year (15.6 percent) in June in Little Rock, Arkansas.
Austin, Texas, experienced an 8.5 percent drop, Wichita, Kansas, prices fell 7.9 percent, prices in Jacksonville, Florida, dipped 7.8 percent and buyers in Cape Coral, Florida, saw a decrease of 7.4 percent.
‘After years of intense competition, it’s 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. ‘It’s not a buyer’s market yet, but we’re headed in that direction.’
Those regions have all seen a boom in new construction as people fled there during the Covid-19 pandemic for a more affordable life and the ability to work remotely.
Demand in Austin and Miami in particular exploded during that time.
Because of that, developers were able to get housing permits fast tracked, which prompted a rush in homebuilding.
Prices for newly built homes fell the most year-over-year in June in Little Rock, Arkansas, with a 15.6 percent decline
Austin has become ‘ground zero’ for the downturn of the once-booming new build market
Austin’s popularity sparked a surge in homebuilding, but the inventory is not being met by strong demand, experts say
Sellers are having trouble with new builds in Cape Coral, Florida, with so many falling in price
Realtor.com chief economist Danielle Hale (pictured) said new build housing prices have dropped
Wichita, Kansas, is seeing house price drops on new builds due to lack of buyer demand
But demand is now failing to keep pace with the glut of homes.
In a city like Austin, where the surge of newcomers drove up home prices, dwindling interest means those stickers are becoming less shocking.
Since the pandemic, the number of people looking to move to the city has diminished, especially since it has lost its affordability factor for many Americans.
In Miami, soaring insurance and homeowners association (HOA) fees are also putting off buyers and pushing down prices.
Despite new-build values plummeting in major southern and western cities, many markets will still have new homes priced higher per square foot than existing homes, especially in the Midwest and Northeast, said the Realtor.com report.
Meanwhile, nearly half of US home sellers are having to give concessions to buyers as as the housing market grinds to a halt.
From January through March 2025, 44.4 percent of home sales across the country included incentives like covered closing costs, repair credits or mortgage rate buydowns, according to a separate report from Redfin.
Some sellers have even offered to cover HOA fees.
These extras come on top of any price negotiations and highlight just how tough the market has become for anyone looking to unload their properties.