Kansas City New Construction Prices Are Dropping — Here’s Why

Did you know that new construction homes in Kansas City are actually selling for less than they were just months ago? At the same time, resale home prices keep climbing. It sounds surprising, but it’s true — and it’s one of the most important trends for today’s buyers to understand.

In this article, I’ll break down why builders are lowering prices, what’s driving the shift, and what it means for you if you’re thinking about buying or selling in Kansas City.

Why New Construction Matters in Kansas City

New construction typically sits at the top end of the housing market. Builders set the tone with the latest designs, features, and price points, and surrounding resale neighborhoods often adjust around them.

So when new home prices start moving downward, it doesn’t just affect builders; it shifts buyer expectations across the board. Buyers compare, sellers take notice, and affordability gets redefined.

In other words, new construction is the trendsetter.

The Numbers Behind the Shift

Let’s look at how this has played out in 2025:

• July 2025: Median new construction prices dropped 3.7% year-over-year, while resale homes increased 7.2%.

• April 2025: New homes fell 9.2% compared to the previous year.

• February 2025: Prices were down 8.8%, while existing homes kept climbing.

This isn’t just a one-month dip; it’s a consistent trend throughout the year.

Big picture: resale homes keep appreciating, while new construction homes are adjusting downward.

How It Looks Across the Metro

Johnson County, KS

Demand here remains strong, especially in Overland Park and Olathe. Builders are less likely to slash prices but often sweeten the deal with design credits, mortgage rate buydowns, or closing cost assistance.

Lee’s Summit, MO

Homes over $600,000 have seen noticeable price reductions. Builders know affordability is tight, so move-in-ready homes are more likely to be discounted.

Clay & Platte Counties, MO

Competition is fierce in these northern markets. Prices are lower than Johnson County or Lee’s Summit, but builders must compete directly with affordable resale homes — which means buyers often find better deals on new construction here.

What’s Driving the Price Adjustments?

1. Builder Competition & Inventory Pressure

Even though the number of new homes on the market is slightly down from last year, supply is still sitting around 5 months in many sub-markets. That’s more than double the 2.5 months of resale inventory.

Builders can’t afford to let homes sit. Carrying costs eat into profits, so they’d rather adjust prices or offer big incentives than wait it out.

2. Affordability Challenges & Interest Rates

With mortgage rates hovering between 6–7%, many buyers have stepped back. On a $500,000 new home, that could mean a $3,500–$3,800 monthly payment. Builders know dropping the price or buying down the rate can make all the difference in getting a deal done.

3. Resale Homes Closing the Gap

Buyers compare every option. A resale at $325,000 vs. a new build at $525,000 feels like a massive gap, even when new homes come with warranties and efficiency upgrades. Builders are shrinking that gap to stay competitive.

4. Seasonal & Economic Factors

Spring and summer are peak buying seasons. When homes don’t sell fast enough, builders adjust quickly before heading into fall. Add in the constant national conversation about affordability, and it’s clear why builders are motivated to show value now.

Is This a Market Crash?

No. This isn’t 2008.

Instead, think of it as a normalization. During the pandemic, builders had record sales — homes sold before they were even finished. Now, higher rates and tighter affordability mean they’re simply realigning prices to meet demand.

Kansas City is still growing. Population is on the rise, employers are moving in, and demand for housing — both resale and new construction — remains strong.

Price adjustments aren’t a sign of weakness. They’re a sign that builders are staying competitive.

What This Means for Buyers

For buyers, this shift represents opportunity.

• You may be able to get price reductions on homes that wouldn’t have budged last year.

• Builders are layering incentives on top of price cuts: mortgage rate buydowns, free upgrades, or closing cost assistance.

• With resale inventory still tight, new construction could offer you better terms than you’d expect.

What This Means for Sellers

Sellers of resale homes should pay attention, too.

When buyers see new homes with incentives, it can impact how they view resale pricing. If your home doesn’t feel competitive in value compared to a new build, you may need to adjust expectations or highlight features that new homes can’t offer, like mature trees, established neighborhoods, or lower tax bills.

FAQs

Why are new construction homes cheaper right now?

Builders are facing more competition, higher inventory levels, and affordability challenges due to interest rates. To move homes, they’re cutting prices or offering incentives rather than letting homes sit on the market.

Is this a sign the Kansas City housing market is crashing?

Not at all. Kansas City is still growing, and demand remains strong. What we’re seeing is a normalization, not a collapse — builders are simply adjusting to keep pace with buyer demand.

Do builders always lower prices instead of offering incentives?

Not always. In high-demand areas like Johnson County, builders often prefer to keep the base price firm while offering rate buydowns or design credits instead. In other areas, especially where competition is stronger, they’re more willing to reduce prices directly.

Should I wait to buy a new construction home?

If you’re financially ready, now is actually a strong time to buy. Builders are motivated, incentives are generous, and you may not see this combination once rates stabilize or demand picks up again.

What’s better — buying new construction or resale right now?

It depends on your priorities. Resale homes may come at a lower purchase price, but new construction often brings energy efficiency, warranties, and modern layouts. With incentives in play, new homes are more competitive than they’ve been in years.

Conclusion

Kansas City’s new construction market is shifting — but that shift spells opportunity for buyers. Builders are motivated, inventory is healthy, and incentives are making homes more affordable than they were just months ago.

If you’re considering a move, now is the time to explore your options.

Thinking about buying or selling in Kansas City, or any of the surrounding communities? Let’s chat! I can create a personalized plan just for you.