New Home Sales Fall 10.5% in July as Affordability Pressures Persist

Highlights

• New single-family home sales declined 10.5% in July to a seasonally adjusted annual rate of 607,000.
• July sales were 6.3% below the year-earlier pace.
• New-home inventory increased to 488,000 units, representing a 9.6-month supply.
• The median new-home sales price fell to $393,800, down 2.3% from June.
• Year-to-date sales increased in the Northeast but declined across the Midwest, South and West.

Affordability pressures are weighing on demand for newly built homes, creating challenges for builders and developers managing project pipelines, pricing and construction schedules. New single-family home sales dropped sharply in July, while available inventory increased and the median sales price moved lower.

July Sales and Inventory

New single-family home sales fell 10.5% in July from June to a seasonally adjusted annual rate of 607,000. The July pace was also 6.3% below the same period a year earlier.

New-home inventory reached 488,000 units during the month, a 1.9% increase from June and a 1.6% decline from July 2025. At the current sales pace, the inventory represents 9.6 months of supply, the highest level recorded since January.

The median price for a newly built home was $393,800, down 2.3% from June and 0.9% from a year earlier. Higher-priced homes accounted for a larger share of sales, with homes priced above $800,000 representing 8% of July sales, compared with 5% a year earlier.

Regional Housing Market Trends

New-home sales performance varied considerably by region. On a year-to-date basis, the Northeast recorded an 8.8% increase in sales.

The Midwest posted a 6.4% decline, while sales decreased 3.7% in the South and 6.4% in the West. The broader national market remains affected by elevated borrowing costs, inflation and affordability constraints.

For builders, the sales slowdown can affect decisions involving land development, construction starts, pricing strategies and inventory management. A larger supply of completed and under-construction homes also increases the importance of aligning construction activity with buyer demand.

Builder and Developer Implications

The July figures indicate continued pressure on the single-family construction market. Year-to-date new-home sales were down more than 4%, according to the National Association of Home Builders, putting the sector on pace for a second consecutive annual decline.

The combination of slower sales, elevated inventory and affordability challenges gives builders additional factors to consider when planning future projects. Regional differences also remain important, with market conditions varying significantly across the country.

Source: NAHB.