New home sales in July were at a seasonally-adjusted annual rate of 652,000, down 0.6% compared with June and down 8.2% compared with July 2024, according to estimates from the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
As of the end of July there were about 499,000 new homes available on the market in the U.S. – a decrease of 0.6% compared with June but up 7.3% compared the July 2024.
That’s about a 9.2-month supply at the current sales rate.
The median sales price of a new home sold in July was $403,800, down 0.8% compared with June and down 5.9% compared with July 2024.
The average sales price of a new home sold in July was $487,300, down 3.6% compared with June and down 5.0% compared with July 2024.
“July new-home sales exceeded consensus expectations, and June’s sales was revised upward,” says Odeta Kushi, deputy chief economist for First American, in a statement. “Despite this upside surprise, sales remain down 8% year over year, and months’ supply remains elevated at 9.2 – well above the pre-pandemic, five-year average of 5.6.”
As Kushi explains, the impact of builder incentives may be diminishing.
“Builders have relied heavily on incentives, such as mortgage rate buydowns, upgrades, and even price reductions, to support demand and maintain an edge over the existing-home market,” she says. “However, the recent pattern of sales – holding at relatively subdued levels – suggests these measures are becoming less effective amid strained affordability, rising resale inventory, and macroeconomic uncertainty.”
“According to NAHB’s latest survey, 66 percent of builders reported using sales incentives in August, up from 62 percent in July, and the highest share since the pandemic,” Kushi says. “Price cuts were reported by 37 percent of builders, a level that has held relatively steady for three months. These concessions have contributed to a decline in new-home prices, with the median price falling nearly 6 percent year over year to $403,800 in July, though part of this drop may reflect a shift in the mix of homes sold. The median new home sold for about $19,000 less than the median existing home in July.”
“It is important to note that new-home sales remain above pre-pandemic levels – a contrast to existing-home sales,” she adds.
Photo: Annie Gray