Lookup is the built-in way of both searching for and creating new notes. You can find it in the command palette or you can assign a hotkey to it for quicker access.
It's recommended to always use Lookup to create new notes
The Lookup modal searches both through the file name and any title properties (See: Special Properties ). That means you don't have to remember the whole path to get a match.
If a path or title cannot be found, you can use the "Create New" option to instantly create a file with the path you've typed in.
In version 1.7.0 the lookup modal got an upgrade to allow for fuzzy search. The characters that are relevant for the search is highlighted in bold and with the choosen “Accent Color” in Obsidian settings.