Growing Price Gap Between New and Existing Homes (CHART)

Reports for February’s Existing Home Sales and New Home Sales don’t come out until next Wednesday 3/21 and Friday 3/23 respectively, but I’m posting the sales charts through January below. Also below is a chart on median prices of New and Existing homes (data that’s part of those two sales reports).

I’ll comment more when the February reports print next week, but for now, one thing catching my eye is the growing gap between median prices for new vs. existing homes (third chart below).

As of January, median Existing Home price was $154,700 and median New Home price was $217,100—a full 40.34% higher.

These are national prices and you must analyze local prices to make good decisions (here’s why), but still … that gap raises the question:

Are people really paying a 40% premium for new construction?

Part of the answer is provided in the chart’s accompanying notes.

I’ll leave it there for now, and pick this up next week using February’s numbers. Comment below or send me a note if you have thoughts on this and I can include in next week’s follow up.

CHART 1: EXISTING HOME SALES 2005-PRESENT

CHART 2: NEW HOME SALES 2005-PRESENT

CHART 3: EXISTING VS. NEW HOME MEDIAN PRICES 2000-PRESENT

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Source:
I got charts from NAR site while researching this piece on the rising rate of contract cancellations for Existing Home Sales.