ST. JOHNS, Fla. – Buying a brand-new home may no longer mean paying a big premium.
A new report from Realtor.com shows the price gap between new construction and existing homes has fallen to a record low, and Jacksonville is among the metro areas seeing some of the steepest declines in new-home list prices.
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Phil Wade admits he wasn’t initially interested in new construction.
“Originally, I was looking for something that was existing, that may have some of the bones that I want, that I could enhance,” Wade said.
But once he started comparing prices and incentives, he said it only made sense to make the switch.
“A lot of incentives are offered by large builders. They can buy down interest rates, they can do things to really make your dollars go a long way in today’s day and age,” Wade said. “That really made it hard to say no to new construction.”
Since 2016, Realtor.com has tracked the “price premium” for new homes, which is the gap between median list prices for new builds compared to existing homes. In the second quarter of this year, that premium dropped to 7.8%, the lowest on record.
Builders are keeping prices steady while existing-home prices continue to climb. Incentives like mortgage rate buydowns also mean buyers may pay a lot less for a brand-new house compared to resale homes of similar size.
Local realtor Shauna Clark said affordability is often less about the sticker price and more about the monthly payment.
“Right now, so many buyers are payment-focused,” Clark said. “Even a 1% drop in the interest rate can be a game changer.”
Clark explained that some builders have been able to lower rates into the 3% range for qualified buyers.
“You can get a [new construction] home for $300,000 and pay around $2,000 a month,” she said. “On the resale side, that same monthly payment could cost closer to $3,000.”
Jacksonville ranks among the top five metro areas for new-build price declines, with list prices down about 8% year over year in the second quarter, according to the report.
Analysts say the drops are being driven by a combination of high mortgage rates, weaker buyer demand, and builder strategies to deliver more affordable options.
Wade’s advice to anyone in the market: don’t overlook new construction. He estimates his savings are close to $40,000.
“If you don’t look at new construction, you’ve left something on the table,” he said.