Sales of new single-family houses in March were at a seasonally adjusted annual rate of 682,000, according to estimates released jointly May 5 by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). That was 7.4% above the February rate of 635,000, and 3.3% above the March 2025 rate of 660,000.
The report comes in after a surprisingly sharp rise in housing starts in the latest New Residential Construction report. Builders have been exceedingly cautious in recent months due to challenges in the housing market and the economy, but the latest construction data saw that “builders are responding to pockets of improving demand despite ongoing affordability challenges,” as stated by the National Association of Home Builders’ (NAHB) Chairman Bill Owens.
Rises in new home sales could continue this optimism from builders.
Sales of new single-family houses in February 2026 were at a rate of 635,000, 8.9% above the January 2026 rate of 583,000
The seasonally adjusted estimate of new houses for sale at the end of March 2026 was 481,000, 0.4% below the February 2026 estimate of 483,000, and 4.6% below the March 2025 estimate of 504,000.
This represents a supply of 8.5 months at the current sales rate. The months’ supply is 6.6% below the February 2026 estimate of 9.1 months, and 7.6% below the March 2025 estimate of 9.2 months.
Sales price drops
The median sales price of new houses sold in March 2026 was $387,400, 5.3% below the February 2026 price of $409,000, and 6.2% below the March 2025 price of $412,900. The average sales price of new houses sold in March 2026 was $503,100, 3.4% below the February 2026 price of $521,000, and 1.2% below the March 2025 price of $509,200.
Realtor.com® Senior Economist Joel Berner noted that the pace of new-home sales has returned closer to its regular level in recent years, with the most notable result from the February and March data release being that the median sales price of new homes across the country is the lowest released by the Census Bureau since 2021.
“Builders, facing compressed margins from increasing costs and soft buyer demand, are choosing to stay afloat on volume,” he said. “They are slashing prices to attract buyers and move through their inventory backlog, which has led to a median new-home sales price that is more than $20,000 lower than the median existing-home sales price for March. This boosted pace of sales has slightly decreased the months of supply of new homes for sale, down to 8.5 months from 9.2 last March.”
Berner added that regionally, sales activity picked up everywhere but in the West (-12.7%) on a year-over-year basis. The Midwest (+11.8% YoY) led the way followed by the South (+8.1% YoY) and Northeast (+3.8%).
“The regional mix of sales may be contributing to the price retreat, as the South and Midwest generally have lower prices than the Northeast and West,” he explained. “The soft sales activity out West will not inspire confidence in Western builders who are already slowing their new construction activity.
“The number of completed homes for sale continues to exceed the number of unstarted homes. Builders still have fully built inventory they are trying to sell, though many have decided to cut back on spec building in favor of receiving orders for more to-be-built homes. If builders continue to be forced to offer such sizable price reductions, expect fewer spec homes to hit the market and for builders to sell more pre-construction homes instead.”
Berner further opined that it is a great time to find a deal on a new build because not only are new-home sales prices now actually lower than existing homes, but builders are still offering incentives like cash at closing, free home upgrades and mortgage rate buydowns that make the savings on buying new construction even greater.
“Builders are in a tough position, being forced to take high volumes of low prices, but they will not do this forever,” he cautioned. “Buyers in the new construction market right now can take advantage of some serious purchasing power.”
Overall, Owens claimed conditions have improved for new homes.
“An uptick in new-home sales reflects improving demand conditions, supported by a modest pullback in mortgage rates and ongoing supply constraints in the existing-home market. Builders are gradually increasing production, but elevated construction costs and labor shortages continue to limit the pace of expansion.”
Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis, also saw near-term reasons for optimism—though still with significant uncertainty.
“Looking ahead, the rise in new-home sales points to a modest strengthening in residential construction activity in the near term. However, the outlook remains sensitive to interest rate movements and affordability conditions, which will ultimately determine the sustainability of this momentum.”
