The new home market continues to face adversity due to economic challenges, as the latest data from the Department of Housing and Urban Development (HUD) and the Census Bureau saw sales reach a new low for 2026.
New-home sales in July clocked in at a rate of 607,000, down 10.5% from June’s upwardly revised rate of 678,000 (originally 628,000). Sales are also down 6.3% year-over-year from a rate of 648,000 in July 2025.
Ali Wolf, chief economist at NewHomeSource and Zonda, added that the new home market has been “challenging for builders.”
“More than half of major markets underperformed their historical average, with mortgage rates keeping payment-sensitive buyers on the sidelines,” she continued. “Consumers still want to buy homes, but uncertainty is making them more cautious.”
Looking regionally, the Northeast was what Realtor.com® Senior Economist Joel Berner called a “bright spot for new home sales.” The Northeast was up 30.3% to a rate of 43,000, also up a whopping 95.5% year-over-year. However, Berner also said that “wide confidence intervals force us to take these results with a grain of salt.”
The West also performed a bit better in July, up 6.2% month-over-month and 2.2% year-over-year to a rate of 138,000.
On the other hand, the South was down 13% month-over-month and 5.2% year-over-year to a rate of 383,000. The Midwest saw a more serious struggle, down 42.7% month-over-month and 50.6% year-over-year to a rate of 43,000.
In terms of inventory, the amount of new homes for sale was up 1.9% month-over-month to 488,000, but was diminished 1.6% year-over-year. The supply, however, was up both month-over-month and year-over-year by 12.9% and 4.3%, respectively, to a rate of 9.6 months (at the current sales rate).
Price-wise, the median sales price dipped 2.3% month-over-month and 0.9% year-over-year to $393,800.
Berner noted that “once again” the new home median price is “well below” the existing-home median price in July, namely due to a “mix effects of where new and existing homes are located, as well as to relative softness in the new home segment.”
Due to challenges in the market, builders have also been performing many price cuts in order to sell their properties. Wolf noted that in Zonda data, 25% of builders lowered prices in July, compared to 21% in June.
“Builders are leveraging financing tools, right-sizing floor plans, and offering homes with lower spec levels to keep costs and monthly payments more manageable to turn caution into confidence,” she explained.
Wolf also noted that “until affordability meaningfully improves, the market is likely to keep treading water.”
