Urban New Construction Is Scarce, Expensive, and in High Demand

Urban new builds account for just 11% of listings but carry a 78% price premium

AUSTIN, Texas, May 7, 2026 /PRNewswire/ -- Realtor.com^® today released its first quarter 2026 New Construction Insights Report, revealing a tale of two housing markets: an urban new construction market defined by scarcity and steep premiums, and a suburban one marked by stability and competitive pricing. The report finds that while new construction has shown remarkable resilience overall, where new homes are being built is shaping who can afford them  and how much they will pay.

Urban new builds are rare. Nationally, just 10.9% of new construction listings are in urban zip codes, compared to nearly 30% of existing homes. When they do appear, buyers pay a significant premium: urban new construction carries a 78.4% price premium over urban existing homes, with a median listing price of $738,662 versus $414,000 for existing urban homes.

"New construction is overwhelmingly a suburban story in the United States, and that has real consequences for buyers who want to live in cities," said Joel Berner, senior economist at Realtor.com^®. "Urban new builds are difficult to deliver, and that difficulty is priced in. When a new home does come to market in an urban zip code, it commands a price that reflects just how hard it was to build there."

Where New Homes Are Built Determines How Much They Cost

New construction homes for sale are overwhelmingly located in suburban areas and that impacts their price. Nearly 80% of new homes for sale are suburban, compared to just over 55% of existing homes. Suburban new builds carry just a 7.0% premium over suburban existing homes. Suburban new construction is plentiful, competitive, and concentrated in the South, where listing prices tend to be lower.

Urban new construction is a different market entirely. New construction is underrepresented in urban areas. Nearly 30% of existing homes for sale are in urban zip codes, but just over 10% of new construction homes are.

Seven metros have a majority of their new construction listings in urban zip codes: New York (69.6%), Miami (69.5%), San Francisco (68.9%), Los Angeles (68.8%), New Orleans (62.4%), Urban Honolulu (53.8%), and San Diego (53.4%). Every one of those metros carries a new construction premium above the national average. Miami's new construction premium stands at 305.2%. New York's is 106.8%.

At the other end of the spectrum, nine of the ten metros with the lowest new construction premiums have urban shares of new construction listings below 10%. In Cape Coral, FL, Austin, TX, Boise, ID, and Pensacola, FL, new construction is actually less expensive than existing homes, with negative premiums ranging from -13.5% to -4.8%. In each of these markets, new homes are concentrated in suburban and rural zip codes while existing homes are far more urban — making direct price comparisons misleading without that context.

The metros with the steepest urban new construction premiums include Miami, where urban new builds carry a median listing price of $2,578,695 — a 461.8% premium over urban existing homes. Tampa, St. Louis, Detroit, and Chicago also appear on the list, a mix that underscores that demand for urban new construction is not limited to expensive coastal cities.

"The price signals for urban building are clear," said Berner. "As more jurisdictions streamline permitting and adopt more permissive zoning, builders will follow the opportunity. The demand is there — the question is whether the policy environment will allow supply to catch up."

New Construction Holds Steady While Existing Home Prices Fall

Nationally, the median listing price for new construction came in at $449,373 in the first quarter of 2026, essentially flat compared to $449,150 one year ago. Existing home prices told a different story, falling 0.9% year over year to $390,550. That divergence has pushed the new construction premium — the gap between what buyers pay for a new home versus an existing one — up to 15.1%, from 14.0% a year ago.

Inventory trends are also shifting. New construction inventory growth has held steady in the 5% to 9% range year over year, while growth in existing home inventory is slowing to match it. New construction's share of total listings on the market held nearly flat at 19.3%, compared to 19.4% last year.

For the second consecutive quarter, new homes have seen price reductions at a higher rate than existing homes — even as overall new construction prices have remained stable. That combination points to active price management by builders, who are listing homes higher and adjusting down to meet buyers.

"Builders are navigating a difficult environment," said Berner. "They are facing rising costs for labor and materials while competing for buyers who are already stretched by high mortgage rates and economic uncertainty. The fact that prices have held steady is a testament to how carefully builders are managing their inventory — but the uptick in price reductions tells you the pressure is real."

Time on market for new construction has remained constant, even as the existing home market continues to slow. Price per square foot has also returned to its expected relationship, with new homes now commanding $217 per square foot versus $216 for existing homes — a gap that had been inverted for much of 2025.

Methodology

Realtor.com^® housing data as of March 2026. Listings include the active inventory of newly built single-family homes and condos, townhomes, row homes, and co-ops on Realtor.com®. Realtor.com^® new construction data history goes back to January 2023. Zip codes are categorized based on RUCA codes from the U.S. Department of Agriculture, household counts and square mileage provided by Claritas, and pedestrian and public transit scores provided by Local Logic.

About Realtor.com^®

Realtor.com^® pioneered online real estate and has been at the forefront for over 25 years, connecting buyers, sellers, and renters with trusted insights, professional guidance, and powerful tools to help them find their perfect home. Recognized as the No. 1 site trusted by real estate professionals, Realtor.com® is a valued partner, delivering consumer connections and a robust suite of marketing tools to support business growth. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc.

Media Contact: Mallory Micetich, [email protected]

SOURCE Realtor.com