Elevated construction costs and global issues affecting trade have pushed the housing market to new lows as of late.
But the latest data from the Department of Housing and Urban Development (HUD) and the Census Bureau show that 2026 may not end on a disappointing note—at least in one sector.
For August, sales of new single-family homes reached an annual rate of 684,000. This marks a monthly 6.4% increase, as July’s revised rate of new-home sales stands at 643,000 (originally 607,000).
Although a slight increase from this summer’s drop—where May fell to a revised rate of 636,000, but was originally reported at 580,000—August’s rate for new-home sales is 2% below the rate from a year ago, which was 698,000.
That contrasts with existing-home sales, which continued to slide toward historic lows this summer.
Chairman of the National Association of Home Builders (NAHB) Bill Owens clarified that, “the gain in new home sales is encouraging, but affordability remains a challenge.”
While the report’s results are sending mixed signals, Realtor.com® Senior Economist Joel Berner looks at what they could mean for the future.
“New home sales have struggled in 2026 as high mortgage rates and affordability concerns keep buyers on the sidelines,” he notes. “This month’s rebound as well as the upward revision to last month’s figure are encouraging signs for the new home market.”
Regionally, new-home sales have significantly different rates of growth.
The Midwestern and Southern markets saw notable gains in sales month-to-month. The Midwest saw an 84.9% increase between July and August, jumping from a rate of 53,000 to 98,000. Southern new-home sales also rose, but by a much smaller margin, at nearly a 7% increase monthly.
Both the Midwest and South regions have grown in terms of new-home sales annually, by 22.5% and 3.4%, respectively.
The Northeast and West, however, fell on both a monthly and annual basis. The Northeast fell over 36% from July to August, going from 36,000 new-home sales down to 23,000. The West fell by over 15%, down from July’s 132,000 to 112,000.
This left the Northeast’s rate 20.7% lower than the same period last year, while new-home sales in the West are down nearly 27% as well.
Although purchases for new homes are up, the report highlights that inventory of new homes for sale is virtually unchanged from the previous month at 483,000, but remains below August 2025’s estimate of 493,000.
Previously, HUD and the Census Bureau reported that construction for new homes dipped in August. Coupled with the minor gains in new-home sales month-over-month, analysts are skeptical of how builders will fare in the face of economic headwinds.
“Builders are describing the housing market as slow, competitive, and challenging—and consumers would likely say the same,” Ali Wolf, NewHomeSource and Zonda chief economist says.
Wolf’s remarks reflect recent data on homebuilder sentiment. High energy and construction costs, along with labor shortages exacerbated by immigration policy, have pressured builder activity to slow down.
“High mortgage rates and weak consumer confidence are hitting housing demand with a one-two punch,” she continues. “Your dollars can stretch further with new homes than resale homes right now, especially as more builders are lowering prices and offering attractive rate buydowns, but consumers are becoming increasingly desensitized to these discounts. It’s tough out there, but the new home market continues to hold its ground.”
Going forward, NAHB Assistant Vice President Danushka Nanayakkara says “lower financing costs” could sustainably improve affordability.
Owens, however, turned to builders and what they can do to survive turbulent times. “Sales are still down year over year and year to date, and builders continue to use incentives and pricing adjustments to support buyers as limited existing-home inventory helps sustain the new-home market,” he says.
