"Right now the divide between new and existing home prices is wider than ever. The average price of an existing home in December was $231,400, according to the National Association of Realtors, while the U.S. Commerce Department reported the average price of a newly built home stood at 304,000. " http://www.cnbc.com/id/100439451 ------------------------- My question: Who sets the price of the house? (I understand the land, construction costs and location are the main factors, but this is not real life at the moment) Imo, the appraisal. I get the impression it's easier to mortgage a new house than an existing one, for the simple reason, if the owner defaults the bank takes possesion of a readily saleable property. New fixtures, less maintenance, etc. Too many unknowns in an existing piece of real estate. The great divide comes for the appraisal end. Banks are redlining product as opposed to years ago, redlining zip codes.