Grant Cardone, the real estate investor and entrepreneur known for his direct approach to financial and market commentary, recently addressed one of the most persistent questions in U.S. housing: why new homes are often cheaper than existing properties. His explanation was straightforward: “Mystery Solved. Why are new homes selling cheaper than existing. New homes [are selling] $33,500 cheaper than existing homes.”

Cardone analysed and explained why this seems to be the case, despite the obvious paradox.

“1) Seller is more motivated. Builders have inventories to sell & a homeowner has one house to sell. 2) Builder has construction debt & $70% of home owners have sun 4% long term mortgage. 3) Home builders are buying mortgage rates down to make deals & other gimmicks. 4) Most are less expensive markets. If you want to sell your home at a maximum price offer for gimmicks buy down rates or do short term owner financing until rates come down.”

In short, home builders can’t offer competitive pricing. And sitting on housing inventory only makes the prices go up from interest and maintenance costs. Similarly, it’s a bit easier to sell someone on one's unique home, especially with a motivated seller, than it is to get dozens of people to buy near-identical homes in a subdivision. 

One reason not mentioned by Cardone that’s certainly contributing to this phenomenon is the perception — or reality — that newer-built homes are just lower quality. Many newer homes are thrown up and stapled together. Companies like D.R. Horton (DHI) have specifically grown a reputation for poor build quality. Plastic siding, cheap paint, missing or limited fasteners, and a host of other corners cut. Especially on social media platforms like TikTok, accounts that conduct home inspections are constantly going viral for finding vital flaws in newly built homes. Some of these homes have a 7-figure price tag, and their first-ever buyers might have roof or foundation issues. 

Cardone’s analysis reflects the intersection of structural market dynamics and homeowner psychology. Unlike individual sellers, builders often carry significant inventories and construction debt, leaving them more motivated to discount properties in order to move units quickly. Existing homeowners, many of whom locked in historically low mortgage rates in recent years, do not face the same urgency. With roughly 70% of U.S. homeowners holding mortgages below 4%, the incentive to hold onto their property is strong, which can sustain higher asking prices.

Cardone also points to the role of financing tactics. Homebuilders are increasingly offering mortgage rate buydowns and other incentives to attract buyers. These strategies are designed to offset the impact of higher interest rates, making new homes appear more affordable compared to existing ones. For buyers weighing options, these so-called “gimmicks” can significantly alter monthly payment calculations, even if the headline sale price does not fully reflect the long-term cost.

The observation that new homes are often concentrated in less expensive markets further explains the price discrepancy. Builders tend to develop on the periphery of metropolitan areas or in regions where land costs are lower, while existing homes are frequently located in more established — and often pricier — neighborhoods. This geographic factor reinforces the statistical gap Cardone highlights, where averages show new construction undercutting resale prices.

Cardone’s commentary carries weight given his background. Over several decades, he has built a real estate portfolio valued in the billions, largely in multifamily properties, and has become a well-known figure in sales training and financial education. His perspective comes not only from market observation but from active participation in large-scale real estate transactions. For many, this lends credibility to his assessments of trends shaping housing affordability.

In the broader market context, his remarks underscore a recurring theme in real estate: the divide between professional developers with capital obligations and individual homeowners with long-term financing stability. This dynamic plays an important role during periods of elevated mortgage rates, when builders turn to incentives to keep sales moving and owners, with little urgency to sell, prefer to wait.

Cardone’s conclusion, that sellers seeking maximum price should consider offering financing strategies such as buydowns or short-term owner financing, ties back to a central theme of his work: adaptability. In his view, success in real estate depends on understanding the motivations driving each side of a transaction and adjusting accordingly.

Ultimately, his analysis situates the pricing disparity between new and existing homes not as a temporary anomaly, but as a logical outcome of the structural differences between institutional builders and individual homeowners.