New Home Sales Down 0.6% in July

Sales of new single-family houses in July were at a seasonally adjusted annual rate of 652,000, according to estimates released jointly today by the US Census Bureau and the Department of Housing and Urban Development. This marked a 0.6% decline from the June’s revised rate of 656,000 – it was originally reported as 623,000 – and an 8.2% drop from the July 2024 rate of 710,000.

The seasonally adjusted estimate of new houses for sale at the end of last month was 499,000, which is 0.6% below June’s estimate of 502,000, but it is also 7.3% above the July 2024 estimate of 465,000. This represents a supply of 9.2 months at the current sales rate. The months’ supply is virtually unchanged from the June estimate of 9.2 months and is 16.5% above the July 2024 estimate of 7.9 months.

The median sales price of new houses sold in July was $403,800, a 0.8% dip from June’s price of $407,200 and 5.9% below the July 2024 price of $429,000. The average sales price of new houses sold in July was $487,300, down 3.6% from the June price of $505,300 and 5% below the July 2024 price of $513,200.

Reaction by industry thought leaders to the new data was mixed. First American Deputy Chief Economist Odeta Kushi observed, “July new home sales exceeded consensus expectations, and June’s sales was revised upward. 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. 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. 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.”

“Affordability challenges continue to sideline many prospective home buyers,” said Jing Fu, senior director of forecasting and analysis at the National Association of Home Builders. “The majority of new homes are now concentrated in the $300,000 to $500,000 price range, reflecting ongoing pressures from elevated interest rates, labor shortages, rising construction costs and inefficient regulatory costs.”

Joel Berner, senior economist at Realtor.com, commented, “Affordable new home inventory is performing best, with the share of inventory priced under $300,000 making up 17% of July’s sales, up from 15% in June. This pulled the median sales price down again, to $403,800, its lowest level since November 2024. The median sales price of existing homes and new homes are moving in opposite directions, and now resale homes are going for nearly $20,000 more than newly built homes. Builders have proven more willing to cut prices than home resellers, but this month’s new home sales data suggests that the aggressive pricing is still not enough to get new homes moving at a faster pace.”