New houses carried a lower price per square foot than existing properties in about a third of major housing markets, The Epoch Times reported, citing Zillow. The reported July median for newly constructed homes was $205 a square foot, below the figure for existing homes.

The comparison measures the price paid relative to a property's size. It does not establish that new houses had lower total purchase prices, or that the same relationship held in every neighborhood within the markets covered.

The supplied reporting does not identify the individual markets, give the corresponding median for existing homes or specify the July observation's year. Without those details, the size of the price gap and its geographic distribution remain unconfirmed.

Zillow is an online real estate marketplace that also publishes housing data and research. Comparisons of new and existing homes describe two different sources of housing supply: properties entering the market through construction and properties offered for resale by their owners.

What the price measure shows

A property's price per square foot is calculated by dividing its sale price by its measured floor area. Expressing prices this way allows homes of different sizes to be compared using a common unit. The median is the middle observation when the individual figures are arranged in order; it is different from an arithmetic average.

A lower figure on this measure does not necessarily mean a smaller purchase bill. A larger house can cost less for each square foot while still having a higher total price than a smaller property. The reported $205 median therefore cannot, by itself, establish the amount a typical buyer would need to spend.

Nor does a median hold every property characteristic constant. Location, lot size, condition, layout and amenities can differ between the new homes and existing homes included in a comparison. A shift in the mix of properties sold can change a median even when prices for comparable individual homes have not moved by the same amount.

The distinction between asking prices and completed sale prices also matters. Asking prices describe sellers' offers, while sale prices reflect completed transactions. The supplied summary describes homes that sold.

Purchase price and ownership costs

For buyers using a mortgage, monthly principal and interest payments depend on the amount borrowed, the interest rate and the loan term. A comparison based on floor area does not incorporate those financing terms.

Property taxes, insurance, association charges where applicable, and maintenance are additional elements of ownership costs. These expenses vary by property and location. They require a separate comparison even when two houses have similar sale prices.

New construction and existing homes also differ in their sales process. Buyers of unfinished properties need to establish completion and delivery terms, while buyers of existing properties typically assess the condition of an already occupied or previously occupied home. Neither category alone determines the better financial choice.

What to watch

Further detail from the Zillow comparison would clarify which markets were covered, how floor area was measured and how large the gap was against existing homes. Subsequent comparable readings would establish whether the July relationship persisted.