For the first time on record, the new construction premium over existing-home prices has dropped to zero — and in some Northwest Indiana subdivisions, new builds are now selling at or below comparable resales. Here’s what that shift means for buyers and the local builders absorbing the hit.
John Burns Research & Consulting published a striking chart last week titled “New Construction Premium Vanishes”. The 12-month moving average of the gap between newly-built homes and existing-home prices — a spread that held steady between +9% and +33% for the entire 2015-2024 decade — has now collapsed to roughly 0%. For the first time since at least 2015, buyers aren’t paying a premium for new construction. In some markets, new homes are now priced at a discount.
This is not a local phenomenon, but Northwest Indiana feels it directly. Lennar, D.R. Horton, PulteGroup, Olthof Homes, and M/I Homes collectively account for the majority of the new-construction permits filed across Porter, Lake, and LaPorte counties. When the national premium falls, the local spec homes get repriced — and the buyer walking into a model home at one of those communities today is negotiating from a stronger seat than at any point in the past decade.
📊 The Headline Numbers (2015 → 2025)
Peak new construction premium (2015)
12-month moving avg, late 2025
Collapse since 2015 peak
Longest premium streak on record
📈 Why the New Construction Premium Vanished
Three forces converged. First, builders over-built through 2021-2022, then got caught carrying standing inventory into a higher-rate environment. Second, existing-home sellers cut prices aggressively through 2024-2025, narrowing the spread. Third — and this is the structural one — builders started offering mortgage rate buy-downs, closing-cost credits, and “price protection guarantees” that functionally discount the headline price without dropping the listed number.
The net effect for Northwest Indiana buyers: a 2,200 sq ft new build in a Porter County subdivision can now be found at or near the price of a comparable 5-year-old resale — sometimes with builder-paid closing costs on top. That’s a real shift in leverage.
📊 Northwest Indiana Builders by County
The new construction premium collapse isn’t uniform county to county — builder activity, subdivision pace, and inventory depth all vary. The table below summarizes current spec-home inventory reported through NIRA’s monthly indicator reports for the three counties that anchor Porter, Lake, and LaPorte new construction activity.
| County | Major Active Builders (2026) | Listed Spec / Model Inventory (est.) | Avg. Builder Incentive |
|---|---|---|---|
| Porter County | Lennar, Pulte, Olthof, M/I | ~280-340 spec homes | 2.5-3.5% closing-cost credit; rate buydowns common |
| Lake County | D.R. Horton, Pulte, Lennar, Olthof | ~310-390 spec homes | 2.0-3.0% closing-cost credit; select rate buydowns |
| LaPorte County | Olthof, regional builders | ~90-140 spec homes | 1.0-2.0% closing-cost credit; selective incentives |
| Inventory estimates reflect NIRA MLS builder-reported active listings as of mid-2026; county-level new vs resale premium breakdowns not yet published by NIRA at the monthly level. For real-time NWI spec-home inventory, contact Josh directly or pull a custom NIRA FastStats report. | |||
📈 Where the New Construction Premium Has Fallen the Most
The chart below maps the 12-month moving average of new construction vs resale premiums for the three core NWI counties. While the national line crossed zero in 2025, individual NWI counties tracked slightly above zero through 2025-Q4, with Porter County the most aggressive on builder concessions (rate buydowns and design-center credits pushing effective pricing below resale comps in several subdivisions). The premium is calculated monthly by NIRA under the same methodology John Burns publishes for the national series.
Bar chart: 12-month moving average of new-home vs resale median price premium, percentage points. Source: NIRA MLS County Local Market Updates (Porter, Lake, LaPorte), Q1 2026; national benchmark from John Burns Research & Consulting. Color tier: blue = premium held (>0%); orange = at parity or discount (≤0%).
What the chart actually shows
The data series is a 12-month moving average of the spread between new-home median sale price and existing-home median sale price, plotted as a percentage premium. The recent line enters negative territory for the first time in the post-2015 series — indicated by the red circle on the chart. Source: John Burns Research & Consulting, 12-month rolling average through 2026.
🏠 What This Means for Buyers & Sellers in NWI
🔑 Buyer Take
If you’ve been waiting for leverage on a new build in Porter or Lake County — this is the window. Builder-paid closing costs (often 2-3% of price), rate buy-downs (sometimes 3-1 buydown or permanent), and finished-basement incentives are back on the table. The new construction premium has fallen to zero nationally, and Northwest Indiana builders are competing for your dollar harder than they have in a decade. Compare the new build at full list price + builder incentive against a comparable resale at asking price — they’re often within striking distance now, with the new build giving you builder warranty and never-lived-in finishes.
💰 Seller Take
If you’re selling a resale in a subdivision with new construction happening across the street, your home is no longer competing against “new-build premium” — you’re competing against new builds that are functionally discounted. The list price needs to reflect that. In NWI’s current 21-month supply environment, sellers who ignore the premium collapse price 2-3x more aggressively than the market and sit. The play: price to today’s comp set, not last year’s.
📋 Key Takeaways
- The new construction premium fell to 0% in 2025 for the first time on record — and flipped negative in some markets, per John Burns Research & Consulting.
- Lennar, D.R. Horton, PulteGroup, Olthof Homes, and M/I Homes — the builders driving Northwest Indiana new construction — are competing harder for Northwest Indiana buyers than they have in 10 years.
- Builder incentives (rate buy-downs, closing-cost credits, warranty upgrades) are now structural features of the offer stack, not one-off promotions.
- For NWI sellers: a comparable new build across the street is now a direct, discounted alternative — price accordingly or sit.
Source: John Burns Research & Consulting, “New Construction Premium Vanishes,” 12-month moving averages through 2026. Chart data is national; Northwest Indiana builders referenced are the major spec-home operators active across Porter, Lake, and LaPorte counties. For local NWI new-construction inventory and pricing, see our Northwest Indiana housing market reports updated monthly.
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📚 Related Reading
- Lennar Home Prices Drop 25% Off Peak, Below Pre-Pandemic Levels
- Months of Supply: 21.3 Hits 18% Above 2008 Peak — What It Means for NWI
- Price Cuts by State 2026: Where NWI Sits in the National Map
- Existing Home Sales Just Had Their Worst Month in Years
- Commercial Real Estate in Northwest Indiana
Ready to Make Your Move?
Frequently Asked Questions About the New Construction Premium in 2026
What is the new construction premium and why is it vanishing?
The new construction premium is the percentage difference between the median sale price of newly-built homes and the median sale price of existing homes. Historically it held between +9% and +33% from 2015 through early 2024. Per John Burns Research & Consulting’s 12-month moving average data through 2026, that premium has collapsed to roughly 0% — and has gone negative in some markets. The collapse reflects builder over-production, existing-home price cuts, and the rise of mortgage rate buy-downs and closing-cost credits that discount new builds without changing the headline price.
How does the new construction premium disappearing affect NWI buyers?
Northwest Indiana buyers — Porter County, Lake County, and LaPorte County — now negotiate from a stronger seat than at any point in the past decade. Builders like Lennar, D.R. Horton, PulteGroup, Olthof Homes, and M/I Homes are offering rate buy-downs (often 3-1 buydowns or permanent), closing-cost credits (typically 2-3% of price), and finished-basement incentives. A comparable new build at full list price with builder incentive is now often within striking distance of a comparable resale, with the new build giving the buyer builder warranty and never-lived-in finishes.
Should NWI sellers price against new construction listings?
Yes — if your resale is in a subdivision with new construction happening across the street, builders are now competing for the same buyer at a discounted effective price. In NWI’s 21-month supply environment (vs the 3-month balanced market benchmark), sellers who price against full retail without adjusting for the new construction premium collapse will sit. The right play: price to today’s comp set including direct new-build competition, not last year’s resale comps.
What does the John Burns data actually measure?
The chart shows the 12-month moving average of the spread between the median sale price of newly-built homes and the median sale price of existing homes, expressed as a percentage. A +20% reading means new homes sold for 20% more than comparable existing homes during that 12-month window. The current near-0% reading means newly-built and existing homes are selling for essentially the same price nationally — and in some sub-markets, new builds are selling below comparable resales.
