In 17 US cities, new homes are now cheaper than old ones

Historically, buying a new-construction home meant paying a premium over older options. But that's starting to reverse as builders deal with rising inventory and an ongoing sales slump.

In some places where building activity has been most aggressive, like the Sun Belt, new homes now sell for less on a price-per-square-foot basis than existing homes, according to Zillow data. In Austin, new construction homes now carry a 19.3% discount to existing homes, while in Raleigh, they're 14.2% cheaper.

Homebuilders have been cutting prices and offering incentives such as closing-cost assistance and mortgage rate buydowns to lure buyers. As of August, builders' months of supply — an industry measure of how long it would take to sell off all inventory at today's sales pace — sits at 8.5. More than six months of supply indicates a market where buyers have the upper hand.

Building has been uneven across the country, and in places where new construction is rare, such as the Northeast and the Midwest, buying a new home still usually comes at a hefty premium over existing options.

Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.