The price gap story varies dramatically by region. Northeast maintains traditional premiums for new construction, while South and West have flipped to favor existing homes.
The regional picture in Q4 2025 is a study in extremes. Northeast new construction commands a $284K premium over resale — land scarcity, permitting costs, and union labor keeping builder prices elevated regardless of national trends. The South, by contrast, is within $1,100 of parity: builders there have flooded the market with entry-level product and are still sweetening deals with mortgage rate buydowns. The West’s inversion narrowed sharply from its Q2 2025 peak of -$115K to -$67K as California new construction ticked up and existing home prices softened slightly in Phoenix and Denver.
Bars above zero = new homes cost more. Bars below zero = existing homes cost more ("flipped" market).
New construction remains a scarce premium product in these regions. Restrictive zoning, higher land costs, and limited builder activity keep new home prices elevated.
Abundant new construction creates competitive pricing dynamics. Builders in these regions have successfully added supply even at lower price points.