CALIFORNIA – A new LendingTree study finds that existing homes in California are significantly more expensive than new construction, reversing the national pattern seen in most states.
While newly built homes in the U.S. cost an average of 37.5% more than existing homes, California defies the pattern.
In California, existing homes cost 24.7% more than new ones – about $193,682 higher on average.
- Median price of existing homes in California: $784,798
- Median price of new homes: $591,116
This makes California the state with the largest price gap favoring new homes. Yet despite their lower prices, new homes in the state remain in limited supply – constrained by high land costs, permit delays, and labor shortages.
Analysts cite high demand and limited inventory as major reasons existing homes remain so expensive. And according to LendingTree, new homes, while potentially more efficient and cost-saving, remain out of reach for many Californians, particularly in high-demand areas.
Using data from the National Association of Home Builders and the U.S. Census Bureau’s 2023 American Community Survey, LendingTree estimated the income needed to afford homes in the state.
Households require about $56,942 less annually for a mortgage on a new home compared to an existing one:
- Income needed for a new home: $173,786
- Income needed for an existing home: $230,728
Vermont and Delaware also see pricier existing homes
California isn’t alone in this reversal. Vermont ranks second, where existing homes cost $34,018 more than new ones – a difference of 8.8%.
In Delaware, existing homes are priced $32,600 higher, or 8% more than new construction.
Factors like scarce buildable land and slower construction pipelines contribute to these disparities.
