Prices for newly built homes fell in a third of major U.S. cities over the past year, offering some relief to homebuyers struggling with affordability.
Little Rock, AR, saw the biggest decline, with median new-home list prices falling 13% in the first quarter of 2025 compared with a year earlier, according to the Realtor.com® economic research team’s New Construction Quarterly Report.
Overall, 32 of the nation’s top 100 metro areas saw declining new-home prices, including six areas where prices fell even though the typical size of new builds grew larger.
The report shows that builders have made progress in delivering smaller and more affordable homes suited to first-time buyers in several markets, particularly in the South.
However, it’s important to note that these price declines were registered before President Donald Trump‘s sweeping new tariffs on imported goods, which homebuilders say could raise the typical cost of a new home by nearly $11,000.
Scroll down for the full list of metros with falling prices
(Getty Images)
“Builders are delivering smaller homes at lower prices and often offering financial incentives that make monthly payments more manageable,” says 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.”
A recent analysis by the Realtor.com economic research team estimated that the U.S. has a housing supply shortfall of nearly 4 million units, underlining the importance of new home construction in filling the gap.
In response to affordability concerns and persistently high mortgage rates, many builders have shifted their focus to homes with smaller footprints and lower price points.
The new report found that in the first quarter, new-home sizes shrank from a year ago in 55 out of the top 100 metros. In 26 of those metros, the median list price for new builds also fell annually.
In an additional six markets, prices fell despite new homes growing larger: Akron, OH; Baltimore; Dallas; Greenville, SC; Madison, WI; and Orlando, FL.
New-home prices are also falling nationally
Nationally, 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.
Since peaking in the third quarter of 2023, the asking price of new homes for sale in the U.S. has steadily declined.
Meanwhile, existing-home prices have done the opposite: The $394,963 median list price for resale homes is up 1.4% since the first quarter of 2024 and 5.1% since the first quarter of 2023.
In March, the median sales price of new homes actually dipped below that of existing homes, as new-home buyers gravitated toward lower-priced inventory when it came time to sign a contract.
The median sales price of new single-family homes sold in March was $403,600, down 1.9% from February and 7.5% from a year earlier.
Homes priced below $400,000 accounted for 50% of all sales in March, up from a share of 43% a year ago, suggesting that more buyers are shopping at the lower end of the price spectrum.
Sales prices for existing homes continue to rise, however, growing 2.7% annually in March, to a median of $403,700.
Despite the progress, looming tariffs could threaten the recent affordability gains in the new-home market, economists say.
A proposed hike in duties on Canadian lumber, from 14% to 34%, as well as tariffs on drywall and other imported construction materials, might raise builder costs significantly.
“Builders’ costs will increase, which means that the price of homes will increase, and the affordability challenges facing prospective homebuyers will only worsen,” says Realtor.com senior economist Joel Berner in the new report. “Builders and consumers alike should keep a close eye on tariff developments that will impact their ability to sell and buy homes at desirable prices.”
