The prices of new homes fell in nearly a third of major metro areas during the past year, according to a report from Realtor.com, giving some hope to families who worry that the housing market is too expensive for them.
The company’s New Construction Quarterly Report found that the median list price for a newly built home in the first quarter of 2025 was $448,393, down 0.3% from the first quarter of 2024 and 1.3% from the first quarter of 2023. Nationally, 32 of the top 100 metropolitan areas saw declining new-home prices. Realtor.com reported that the list includes six areas where prices fell even though the typical size of new builds grew larger.
The price reductions for newly built homes contradicts what is happening to existing homes, which saw price increases of 1.4% in the past year and 5.1% since the first quarter of 2023, according to Realtor.com. Other real estate reports show recent existing home prices increasing even more. In March, the median sales price of new homes dipped below that of existing homes, as new-home buyers were lured to lower-priced inventory.
The Realtor.com report found that builders are making progress in delivering smaller and more affordable homes suited to first-time homebuyers in several markets, including the South. New-home sizes shrank from a year ago in 55 of the top 100 metro areas. In 26 of those metros, the median list price for new homes also fell on an annual basis.
Little Rock, Ark., experienced the biggest price decline, with median new-home list prices falling 13% in the first quarter. It was followed by Oxnard, Calif., which saw an 11.6% drop; Austin, Texas, which was down 9.9%; Baltimore, down 7.9%; and Tulsa, Okla., dropping 6.8%.
However, these lower prices may not last long. The price declines were reported before the Trump administration’s new tariffs on imported goods, which some industry research shows could raise the typical cost of a new home by about $10,900.
“Builders are delivering smaller homes at lower prices and often offering financial incentives that make monthly payments more manageable,” said Realtor.com Chief Economist Danielle Hale. “But looming tariffs on key building materials could limit this much-needed progress and create new cost pressures in the months ahead.”
