"In that situation, I want the existing home, because I get to spend the entire $90k on house, not just $72k. I get $18k more house."
Depends on the age and condition of the house. I suspect that in many cases home buyers would chose a newer home that does not require any work and can be customized to their wants/needs. Sort of like today, those that want the new home pay a premium and those that don't buy an older home.
Nonetheless, the 'fair tax' makes new construction 23% more expensive than existing homes.