The new house costs less than the used one.

Buyers keep asking me if that can be right. They tour a used home in Anna or Little Elm, then they tour a new home a few miles down the road, and the new one has the lower price tag. They want to know if the sign is a trick.

It's not a trick. It's the market right now, all over North Texas.

New homes here are selling for less than homes people have already lived in. And the price is only the start, because builders are still piling deals on top of it.

The numbers in North Texas

Zillow put out its new construction report at the end of September. The numbers cover the whole Dallas Fort Worth metro, so this is Fort Worth, Plano, Frisco, McKinney, Denton, and every town in between. Not just the city of Dallas.

In July, new homes here sold for a median of $175 a square foot. Existing homes sold for $195 a square foot. The brand new home was $20 a foot cheaper.

Put that on a real house and it stops being abstract. On a 2,200 square foot home, the new house comes to $385,000 and the used house comes to $429,000. Same size, same metro, and the new one is $44,000 less before you negotiate a single thing.

This isn't some tiny corner of the market either. New builds made up 25.8% of home sales here in the year that ended in July. That's one in four sales. Back in 2019, it was 18.9%.

Kara Ng, a senior economist at Zillow, called new homes the overlooked opportunity in this market. Her point was simple. Buyers assume new homes are out of reach. So they never even look. The ones who do look get a surprise.

A rule that just flipped

For as long as I've sold real estate, new cost more. Sometimes a lot more.

From 2018 through 2024, new homes sold for more per square foot than existing homes in just about every month. The premium peaked at $25 a square foot in November 2022. In the last 19 months, that has reversed, and builders have sold at a discount in 17 of them.

The national numbers say the same thing. In August, the Census Bureau put the median price of a new home at $393,700. NAR put the median price of an existing single family home at $434,800. The new home was $41,100 cheaper.

John Burns Research and Consulting has tracked this gap back to 1987. Over that run, new homes cost about 16% more than existing homes. This spring the gap went below zero for the first time in data that stretches back close to 50 years.

So why did it flip? Existing home sellers are dug in. Most of them locked a loan rate near 3% back in 2020 or 2021, and they feel no need to move, so they hold their price and wait.

A builder can't do that. A built home that sits costs the builder money each month, in loan payments, taxes, insurance, and upkeep. When a builder needs it gone, the price moves. That's the whole story, and buyers are the ones who gain from it.

Then the builders add deals on top

The cheaper price is not the whole deal. Not even close.

NAHB, the national builders association, released its October survey on October 19. Builder confidence dropped to 29, the lowest reading since June 2012. Buyer traffic dropped to 18 on their scale. That is the weakest since April 2012, if you set aside the first month of Covid.

Builders are not waiting for traffic to fix itself. They're buying it.

In that survey, 43% of builders said they cut prices in October, the highest share in the survey since 2020. The average cut was 6%, and it has been 6% for seven straight months. HomesUSA put the average new home price here at $465,663 in September. A 6% cut on that price works out to nearly $28,000.

Beyond the cuts, 65% of builders said they used sales incentives in October. That's the 19th month in a row where the share held at 60% or more. Here's what those incentives look like when you're standing in a model home in North Texas.

Rate buydowns. The builder spends money to pull your loan rate down. Some deals last two or three years. Some last the life of the loan. Run the math on a $346,500 loan. At 7.4%, the principal and interest payment is about $2,399 a month. At 5.5%, it's about $1,967. That's $432 a month back in your pocket. A person selling a used home has no honest way to match that.

Closing cost help and flex cash. Local trackers follow these offers across North Texas. They put flex cash at $15,000 to $40,000 and up on select homes. Buyers aim that money where they need it most, at closing costs, at a lower rate, or at upgrades like floors and counters.

Sale events on finished homes. D.R. Horton is the largest builder in the US, and it is based right here in Arlington. It is running its Red Tag Event through November 1 on select homes. Communities in Grand Prairie, Terrell, Leonard, and Justin are showing limited time offers right now. The deepest cuts sit on homes that are built and waiting. Not on homes that are still a set of plans.

Builders reach for buydowns and credits before they reach for price cuts, and there's a reason. A price cut becomes the new comp for every home the builder still has to sell on that street. Money spent on your rate never shows up as a lower sale price. It protects their street and still puts real money in your pocket.

Why a resale seller can't keep up

It helps to see who you're really shopping against.

A family selling a used home has one house and a loan to pay off, and they need a set amount of cash out of the sale to buy the next place. They can't cut $28,000 off the price. They can't buy your rate down and pay your closing costs too. The math kills it, so most don't even try.

A builder is playing a longer game across a whole community. HomesUSA counted 8,938 new homes listed for sale across Dallas Fort Worth in September. The average new home here took 129 days to sell. That's a lot of finished houses sitting, and every one of them costs money while it sits. Moving one this month can be worth more to a builder than holding out for full price.

Builders also changed what they're building. The homes going up now are a bit smaller than a few years ago. The lots are a bit smaller too. Buyers feel that in the total price, even when the house itself is new.

The fine print nobody puts in the ad

Cheaper per square foot doesn't make every new home a bargain. There are real traps, and my team points them out on every tour.

A lot of new areas in North Texas sit in MUD or PID tax districts. Those taxes pay for the roads, water, and sewer lines the builder put in. They can add a lot to your bill each month, and they can last for years. The payment in the brochure rarely shows the full weight of it.

Lot premiums and upgrades are the second trap. The base price gets you in the door. The corner lot can add more. So can the nice floors and the big kitchen. Ten percent or more is gone fast. That can eat most of your price win if you are not careful.

The third thing to know is that the best rate offers usually require the builder's own lender. That can still be a great deal. Get an outside quote too. Compare the full bill each month and the full cost over time. And check one key thing. Does the low rate last the whole loan, or does it step back up in a few years?

If you're buying in North Texas

Start where the pressure is. Homes that are done and have sat for 60 or 90 days carry the best deals. The builder's costs have stacked up the whole time. Ask what the full package is worth in dollars, and get it in writing before you talk about upgrades.

Bring your own agent, and bring them on the first visit. The salesperson in the model home works for the builder. Friendly, helpful, and paid to protect the builder's number, not yours. In most new areas, your agent has to be on the list from day one. If not, you can lose the right to have one at all. That is a fight you do not want when you are set to sign.

I wrote earlier this year about what waiting cost buyers who sat on the sidelines hoping rates would fall. This is the other side of that same coin. The break in this market isn't a lower rate for everybody. It's a builder who needs your sale more than you need his house.

If you're selling an existing home

Your listing is not just competing with the house down the street anymore. It is up against a brand new home one town over. That home costs less per foot. It comes with a bought down rate and a builder warranty too. Buyers run that comparison while they're standing in your driveway.

That doesn't mean your home won't sell. Prices here jumped 9.8% this year. The news still called Texas a buyer's market. Homes priced right still sold in under 50 days. It means your price has to survive the new construction comparison, not just last year's resale comps. Up in the north suburbs, prices have gone soft in towns that grew too fast. I wrote about that this year. In those towns, this check is the whole ballgame.

What I'm watching

Mortgage rates are still above 7%, and builder confidence just hit a 14 year low. Put those two facts together and the incentives aren't going anywhere this fall. Builders need sales more than they need top price. That need is your power at the table. You just have to know it is there.

My team works with buyers all over North Texas, from Fort Worth to McKinney and Denton to Terrell. We track which towns have built homes sitting, which builders are cutting prices, and who puts the most cash behind low rates each month. That list changes fast.

If you're thinking about buying, send us a note and tell us your price range and the towns you're looking at. We will send you the list of the best builder deals in those towns right now, and if you want to tour, we will walk it with you, check the taxes and the fine print, and make sure the deal on paper is the deal you get. It doesn't cost you anything to have us in your corner. The builder pays our fee, not you.

The new house costs less than the used one. In more than a decade of selling homes here, I have never been able to write that sentence. If you're going to buy in North Texas, this is the window to do it in.