New houses are still more expensive than existing homes, despite what the data says

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    A sold sign in front of a new home being built on April 16, 2021 in Miami, Florida.Joe Raedle | Getty Images

    A strange and exciting anomaly surfaced in March housing data. The median price of a newly built home was slightly lower than the median price of an existing home sold that month. That hasn’t happened in more than 15 years. 

    “Finally!” you might be thinking. “I can buy a brand-new, pristine home for less than an old one!”

    Not quite. 

    The national median price of a newly built, single-family home sold in March was $330,800, according to the U.S. Census. The national median price of an existing, single-family home sold in March was $334,500, according to the National Association of Realtors. But you aren’t likely to pay less for a new home than a used one – and that’s due in large part to the shortage of lower-priced homes on the market.

    “On a per-square-foot basis, within comparable markets, a new home is still priced higher than an existing home,” said Robert Dietz, chief economist at the National Association of Homebuilders.  

    National median prices mean that half the homes in the market sold for less, half for more. They are not repeat-sales indexes, like the much-watched S&P Case-Shiller home price index. A repeat-sales index measures the increase or decrease in the price of similar homes in similar places over time.

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    The trouble with the median now is that we are currently experiencing an unprecedented housing shortage, which is most acute on the low end of the market. There are so few lower-priced homes for sale that the market activity is skewed to the higher end.

    For example, the number of existing homes priced between $100,000 and $250,000 that sold in March was down 10% from a year ago, according to the NAR, simply because there are so few for sale. Demand is high. Meanwhile,