(WDRB/InvestigateTV) — The price gap between existing homes and new construction is now the smallest on record — and in some markets, a new build can actually cost less than an existing home, according to a new analysis by ConsumerAffairs.
The analysis examined Census building permits and Zillow sales data across 150 of the largest cities in the country, ranking them by the number of new building permits issued and new construction homes sold in January and February.
Jailyn Rodriguez of ConsumerAffairs said the research was driven by a fundamental question about the housing market.
"If you’ve tried to buy a home recently or have looked at the market, you know how brutal and competitive it is out there," Rodriguez said. "So what we wanted to figure out is where new housing is actually getting built and where is it not? Because that gap is a huge reason why many people feel so stuck right now. They just can’t find enough homes to move into."
Dallas ranked first, issuing more than 11,000 new building permits and recording about 3,000 new construction sales in just two months. Houston ranked second, followed by New York City, Phoenix and Atlanta.
Whether a new build is cheaper than an existing home depends on the market. In Austin, Texas, a new home costs about $72,000 less than an existing home. In Raleigh, North Carolina, a new build runs about $4,000 more.
Rodriguez said buyers should ask builders directly about available incentives, as they are not always advertised.
"You want to ask the builders for incentives," Rodriguez said. "Builders right now they’re offering interest rate buydowns and help with down payment. But they’re not always shouting about it. So ask them — and make sure that you’re not skipping the inspection on new homes."
Rodriguez said a new home is not guaranteed to be problem-free. Getting an independent inspection remains an important step even when buying new construction.
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