New Homes in California Sell for $190K Less Than Existing Homes

In California, buying a new home may now be more cost-effective than purchasing an existing one—by nearly $190,000, according to a recent LendingTree analysis based on data from the U.S. Census Bureau and the Federal Housing Finance Agency (FHFA).

The study found that the median price of a newly built home in California is $591,116, compared to $784,798 for an existing home—a gap of $193,682. While new homes typically cost more than older properties nationwide, California is one of a few exceptions where new construction offers a better deal.

California leads in price gap

Nationally, the median price for new homes is $537,791, which is $146,581 or about 37.5% higher than the median price of existing homes at $391,210. But in six states—California, Vermont (8.8%), Delaware (8%), Virginia (2%), Maryland (0.4%), and Utah (0.3%)—existing homes are more expensive than new construction.

Among them, California posted the largest disparity, with a 24.7% difference. It is the only state in the nation where the price gap exceeds double digits.

Experts attribute this to chronic supply shortages caused by decades of zoning restrictions, permit delays, and population growth, especially in urban regions such as Los Angeles. These pressures have inflated prices for resale homes.

“Areas like the Central Valley and Inland Empire have more developable land, making it easier to build homes at reasonable prices,” said Victor Curry, an agent with Douglas Elliman Real Estate. “Builders there are more likely to offer lower interest rates or financial incentives. But in cities like Los Angeles, Orange County, San Diego, and the Bay Area, new development is severely limited, which drives existing home prices higher.”

Price still depends on location and quality

Not all new homes are necessarily better bargains, experts caution. Ethan Baik, board chair at the Korean Real Estate Brokers Association of Southern California, pointed out that some lower-priced new homes might be in less desirable neighborhoods or have smaller footprints. “If the location, school district, and amenities are comparable, new homes in Southern California often cost just as much—or more—than existing ones,” he said.

Incentives and savings attract buyers

Despite supply constraints in major cities, builders are trying to entice buyers with incentives like rate buydowns, closing cost assistance, and discounted prices.

According to Oscar Wei, an economist at the California Association of Realtors (CAR), these perks are attracting more first-time homebuyers who previously would have looked at older homes or single-family resales.

Marco Smith, an agent at the Maryland & Delaware Group, added that new homes also appeal because of their low maintenance costs, warranty coverage, and up-to-date systems like HVAC and roofing. “For many first-time buyers, not having to worry about major repairs for years is a major plus,” he said.

BY HOONSIK WOO [woo.hoonsik@koreadaily.com]