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The housing affordability crisis is forcing homebuilders to do something they\u2019ve almost never done: slash prices on new homes more aggressively than homeowners are for their homes on the market. This is a first for the housing market in recent history, according to a Realtor.com report released Thursday.<\/p>\n
\u201cThe current housing market is entrenched in an affordability crisis, leaving many average American families feeling excluded from the traditional promise of upward mobility and homeownership,\u201d said Stuart Miller, CEO of Fortune 500 homebuilder Lennar, during a December earnings call. Lennar\u2019s average sales price dropped 10% year over year to $386,000 in Q4 2025, according to its earnings report.<\/p>\n
During the fourth quarter of 2025, nearly 20% of new homes faced a price cut, the Realtor.com report shows, and existing home price reductions trail at about 18%. This shift suggests we\u2019re entering a buyer\u2019s market, Realtor.com says, as home prices drop.\u00a0<\/p>\n
\u201cNew construction has been one of the steadiest parts of the housing market over the past few years, but builders are clearly responding to today\u2019s affordability pressures and higher levels of existing-home inventory,\u201d Realtor.com chief economist Danielle Hale said in a statement.<\/p>\n
Affordability will remain strained despite this activity. Mortgage rates are still floating around 6%, much higher than the sub-3% rates homebuyers enjoyed during the pandemic. Considering the median U.S. home price of about $400,000, hopeful homebuyers would have to shell out $80,000 for a down payment. And most Americans don\u2019t have an emergency account of even $1,000 saved up, meaning a down payment would be totally out of the question.<\/p>\n
But for those who are financially prepared to buy a home, discounts on new construction may be welcome news.\u00a0<\/p>\n
\u201cWhat we\u2019re seeing is a market where single-family new construction is filling an affordability gap that resale homes increasingly can\u2019t,\u201d Realtor.com senior economist Joel Berner said in a statement.<\/p>\n
Fall 2023 marked the start of a housing market deep freeze, with existing-home sales at Great Depression lows amid mortgage rates that peaked at 8%. At the time, homebuilders leaned on incentives like rate buydowns, closing-cost credits, and free upgrades.<\/p>\n
At the time, Devyn Bachman, senior vice president of research with John Burns Research and Consulting, said these incentives were the \u201cnumber one\u201d driver for rising new-home sales figures.<\/p>\n
\u201c\u2018Incentive\u2019 is just a big fancy word for discount, and what we\u2019re seeing on that front is that it\u2019s what\u2019s creating a competitive advantage for the new-home market,\u201d she told Fortune <\/em>in 2023. The mortgage rate buydown, the industry term for discounted mortgage rates, is the most \u201cdesired and most effective\u201d incentive offered in the new-home market today, she added.\u00a0<\/p>\n Plus, independent sellers on existing homes couldn\u2019t match those types of incentives typically offered by large builders like Lennar and Toll Brothers, Erin Sykes, chief economist at residential real estate brokerage firm Nest Seekers International, told Fortune <\/em>at the time.<\/p>\n But now, new-home builders are forced to offer straight-up discounts to stay competitive and entice homebuyers.\u00a0<\/p>\n \u201cBuilders are cognizant of the affordability issues facing people all over the country, and they\u2019re responding,\u201d Berner wrote in an August National Association of Realtors report.<\/p>\n While discounts are becoming relatively common (one in five new homes was discounted in Q4 2025), they\u2019re not evenly spread across the country.\u00a0<\/p>\n Price reductions are generally concentrated in the South and West, according to Realtor.com, where much of the nation\u2019s new construction has been clustered in recent years. The states that had an overall share of price-reduced, new-home listings exceeding the national average are relatively nationwide, though: They were Nevada (nearly 25%), Indiana (23.3%), South Carolina (21.6%), Minnesota (21.6%), North Carolina (21.3%), New Jersey (nearly 20%), and Texas (19%).\u00a0<\/p>\n Meanwhile, \u201cnew builds in the Northeast and Midwest are much more of a luxury product and much harder to come by,\u201d so they aren\u2019t discounted with the same level of frequency, according to Realtor.com.<\/p>\n An exception to the trend in new-construction homes facing price drops is with condos and townhomes. During Q4 2025, the median listing price for newly built condos and townhomes was actually higher than for new-build single-family homes.\u00a0<\/p>\n Nearly 10% of all new condos for sale in the U.S. are in New York City or Miami, where median listing prices top $1 million. Meanwhile, new single-family construction is concentrated in more affordable markets like Houston, Dallas, San Antonio, Atlanta, and Phoenix, where prices are closer to the national median.\u00a0<\/p>\n \u201cMore new condos may be targeting luxury buyers, while many new single-family homes are designed for the entry-level buyer,\u201d the Realtor.com report explained. \u201cIt could also be the case that existing single-family homes hold their value better than attached homes.\u201d<\/p>\n<\/div>\n #affordability #crisis #driving #unprecedented #price #cuts #housing #market #Realtor.com<\/p>\n","protected":false},"excerpt":{"rendered":" The housing affordability cris… <\/p>\n","protected":false},"author":1,"featured_media":21356,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[299,7703,2863,12169,359,550,889,12904,398,3301,12905,4283,12906,33,100,12907,11953],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/21355"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21355"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/21355\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/21356"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21355"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21355"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Where the cuts are showing up<\/h2>\n
An upside-down condo market<\/h2>\n