Unusual trend in home sale prices

Unusual trend

We’re seeing something quite rare in the market: newly-built home prices are falling while rising for existing homes. 

We dig into the details below, but this is the big takeaway for agents – whether or not this trend lasts, it shows why it’s important to develop strong relationships with builders and developers.

In today’s Foundation Plans below, we give you a few quick tips on how to make the right approach, and show builders that you mean business in many ways.

And now, let’s get into today’s Blueprint!

- James and David

Newly-built home prices are falling

In March, the median sales price for new homes actually dipped below that of existing homes, as buyers increasingly gravitated toward more affordable inventory. This shift marks a notable reversal of the usual pricing dynamic between new and existing homes.

Half of all new-home sales were priced under $400,000, up from 43% a year ago, suggesting buyers are focused on affordability. Meanwhile, the median sales price for existing homes rose 2.7% year-over-year in March to $403,700.

The gap between list prices is also narrowing. According to Realtor.com, the median list price for a newly-built home in Q1 2025 was $448,393, down 0.3% YOY and 1.3% from two years ago. Meanwhile, existing-home list prices have continued rising, with the median list price hitting $394,963, up 1.4% YOY and up 5.1% from two years ago.

Here are the top 5 metros where the price of newly-built homes has fallen the most: 

1. Little Rock, AR (-12.9%)

2. Oxnard, CA (-11.6%)

3. Austin, TX (-9.9%)

4. Baltimore, MD (-7.9%)

5. Tulsa, OK (-6.8%)

Our take

New-home prices fell in 32 of the nation's top 100 metro areas, including six metros where prices dropped even as home sizes increased. That’s encouraging news for buyers grappling with affordability. Builders continue making progress in delivering smaller, more budget-friendly homes, especially across the South. But here’s the big caveat: these declines all occurred before the latest round of tariffs took effect. Until we see how those policy changes ripple through material costs and pricing, it’s too early to call this a lasting trend.

Homeowner tenure has nearly doubled since 2005

The median homeowner now lives in their home for 11.8 years, according to Redfin via ResiClub. While that’s down from the peak of 13.4 years in 2020, it has still nearly doubled in comparison to 2005, when the median tenure was just 6.5 years. Here are other stats from Redfin’s analysis:

• 40% of baby boomers have lived in their homes for more than 20 years.

• California leads in homeowner tenure, driven in part by Prop 13, which discourages moves by capping property tax increases.

• In Los Angeles, the typical homeowner has stayed for 18.7 years. In San Jose, it’s 17.8. Other long-tenure markets include Cleveland (17.4), San Francisco (16.7), and Memphis (16.5).

• On the flip side, turnover is much higher in relatively affordable Southern metros, especially those attracting new residents.

• Louisville, KY (7.4 years) and Las Vegas (8) have the shortest median tenures. Close behind are Nashville, Charlotte, and Raleigh (each at 8.5 years), where recent migration has kept inventory moving.

Our take

This trend isn’t just notable, it’s structural. State tax policies, an aging population, and long-term homeownership among boomers are all driving tenure higher. As more Americans stay put, housing turnover is slowing, and entry-level buying opportunities are becoming harder to find. It’s essential that we build more homes, but that’s not the whole fix. To truly unlock inventory, we may also need to consider land-use reforms like this one.

Vacation home demand hits low

Homebuyers took out just 86,604 mortgages for second homes (aka: vacation homes) in 2024, down 5% from the previous year and the lowest annual total on record since 2018, as Redfin reports. Second-home loans made up only 2.6% of all mortgage originations, a record low share, down from 2.8% in 2023 and well below the pandemic-era peak of 5% in 2020.

Here are the markets where demand fell the most, based on the year-over-year drop in second-home mortgage originations:

1. Miami, FL: -32.2%

2. Orlando, FL: -28.4%

3. Fort Lauderdale, FL: -28.0%

4. West Palm Beach, FL: -23.7%

5. Tampa, FL: -20.9%

6. Fort Worth, TX: -15.8%

7. Indianapolis, IN: -14.6%

8. Jacksonville, FL: -14.3%

9. Newark, NJ: -13.6%

10. Montgomery County, PA: -12.1%

Our take

Homebuying was sluggish across the board in 2024; it was the second-least affordable year on record. While primary home mortgages fell just 1.4% year over year, second-home mortgages declined at more than twice that rate. Here’s why. First, second homes are more expensive – $495,000 vs. $385,000 for primary homes. Second, they have carried higher loan fees since 2022. Third, with inflation squeezing household budgets, many buyers are cutting back on non-essential purchases like vacation homes. Fourth, slower rent growth and a cooling short-term rental market have made investment less appealing. And finally, the return to in-office work has reduced the practical value of owning a second home.

Schematics

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• Learn how to build real estate systems that scale

Foundation Plans

Advice from James and David to win the day

As we mentioned up top, new-construction homes currently offer the best value for buyers. But even if that trend reversed tomorrow, smart agents would still need to build strong relationships with builders and developers. These are the people who can fuel your pipeline for years to come. Today, we want to share three proven ways to start building those relationships:

Lead with value – Don’t show up empty-handed. The fastest way to get a developer’s attention is to bring them a deal they can’t pass up. That starts with building a strong buyer pipeline and using the marketing strategies we emphasize every week, from door-knocking to open houses to mailers to social media to email and more.

Bring buyers to the site – Developers want agents who show hustle. When you bring serious buyers to their properties, you prove you’re a connector. They want to see someone who can help move inventory when the project is ready.

Perfect your pitch – Be prepared. When you show up on site, know exactly what you’re going to say. Developers are looking for confident, capable agents who understand their goals and know how to support them.

This is just the beginning. For a deeper dive into how to work with developers, watch this episode of Rise Above the Ranks, where we break down our playbook and reverse engineer the process for new agents. Let us know what you think.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“Your time is limited, so don’t waste it living someone else’s life.”— Steve Jobs

Each day is a gift – a chance to live the life that you want. Ruthlessly focus on your goals. Don’t let your past or the fear of being judged distract or paralyze you. Choose to live your life with an integrity that you can be proud of.

- James and David