Plot twist the market didn’t see coming: brand-new homes are now selling for less than resale. Builders are discounting, buying down rates, and basically leaving the door cracked open for retail investors to stroll in and grab turnkey rentals—an institutional-only move just a year ago. If “buy new, cash flow now” sounds like a myth, this week’s data says otherwise.

Story: For the fourth straight month, new-construction homes sold at a discount to resales, about $28K cheaper in June and nearly $19K in July. Median new-home price: $407,200. Even adjusted for size, new builds are cheaper ($218.66/ft² vs. $226.56/ft² for existing). Why? Builders pivoted to smaller, more affordable floor plans and, with ~9.2 months of supply (vs. 4.7 for resales), they’re motivated. They’re also sweetening deals with rate buydowns and closing credits that don’t appear in the sticker price. The South, where most new supply sits, is driving the trend.

So What? This is the rare moment when retail investors can do the institutional playbook: buy new as a profitable rental. Lower capex for years (warranties, modern systems), faster lease-ups (energy efficiency and fresh finishes), and builder concessions that improve yield on day one. A 2-1 buydown or closing cash can be the difference between “borderline” and “bankable” DSCR, without the surprise roof/HVAC bill that nukes year-one returns on a fixer.

What’s Next? This window may not stay wide. If mortgage rates ease and resale sellers finally blink, today’s inversion could narrow. Watch: builder incentive depth, months’ supply on new homes, and how long the per-square-foot gap holds below resales. If incentives start shrinking or inventory clears faster than expected, the “buy new, cash flow now” lane tightens. So, underwrite quickly and lock favorable terms while the buydowns are flowing.

Source: Realtor.com

Top Weekly Stories:

1️⃣ SFR/Multifamily Management: Overall rents dipped 0.2% MoM in August and -0.9% YoY, vacancies hit 7.1% (series high), and Austin stays squishy while San Francisco posts the fastest YoY growth. 🪺 More

2️⃣ Insurance: Homeowners insurance is another affordability villain: projected +8% in 2025 to $3,520 on average—after +9% in 2024 and +20% from 2021–23—pinching deal math. 🪺 More

3️⃣ Mortgages: A soft jobs print knocked the 30-yr to ~6.29% (some lenders quoting high-5s), restoring real purchasing power and giving buyers a late-summer tailwind. 🪺 More

4️⃣ Interesting Trends: The Fed’s Beige Book shows flat growth, softer labor, tariff/insurance cost pressure, and data centers as the rare CRE overachiever, while office/multifamily/retail stay mixed. 🪺 More

5️⃣ Policy Changes: Treasury says new actions to tackle housing costs are imminent (even floating a national housing emergency), signaling potential shifts for builders, lenders, and permits. 🪺 More

📽️ Video Highlight: How I Would Get Into Real Estate Today in 2025 (if I could start over)

🎙️ Podcast Highlight: How the Wealthy Use 1031 Exchanges to Grow Their Portfolios | Michael Velasco

📰 Article Highlight: Streamline Your Rentals: What is a Rental Ledger and Best Practices

💸 Off-Market Deal: Virginia Off-Market Deal