New-home sales fell sharply in July as affordability stayed strained

U.S. new-home sales fell sharply in July even as the median price eased slightly, underscoring why housing affordability remains difficult for many buyers. The Census Bureau and the Department of Housing and Urban Development reported Aug. 25 that sales of new single-family homes were running at a seasonally adjusted annual rate of 607,000.

That was down 10.5% from the revised June rate of 678,000 and 6.3% from July 2025. The annualized figure is a pace, not the number of homes sold during July.

Price relief was limited

The median new-home price was $393,800 in July, down 2.3% from June and 0.9% from a year earlier. The average new-home price was $508,800, a separate measure that should not be confused with the median.

The monthly median can change when the mix of homes sold changes. A lower median therefore does not necessarily mean that the typical buyer received a comparable discount or that affordability has been restored.

Financing remains a major constraint. Freddie Mac reported that the average 30-year fixed mortgage rate was 6.66% for the week ending Aug. 27, up from 6.65% the prior week and 6.56% a year earlier. That rate environment means even a modestly lower purchase price may not produce a meaningfully lower monthly payment.

Inventory is taking longer to clear

The number of new homes for sale stood at 488,000 at the end of July. That was up 1.9% from June but down 1.6% from a year earlier.

At July’s sales pace, the inventory represented 9.6 months of supply, up from 8.5 months in June and 9.2 months in July 2025. The measure shows how long the available supply would last if homes sold at the current annualized rate; it is not, by itself, a formal government judgment about whether the market is balanced.

The combination of weaker sales and more months of supply indicates that available homes were moving more slowly in July. That may give some buyers more choices and room to negotiate, while builders face pressure to use incentives, adjust prices or moderate construction. The report does not establish which strategy any individual builder will use.

What it means for buyers

More inventory can give shoppers additional choices and, in some cases, greater negotiating leverage. Builder incentives may also be available, but buyers should compare the full financing package rather than focusing only on the advertised price. That includes the interest rate, taxes, insurance, mortgage insurance, fees and any temporary rate buydown or other incentive.

The July report covers new-home sales, not existing-home sales or housing starts, and the Census figures are preliminary and subject to revision. Upcoming housing reports and mortgage-rate readings will help show whether July was a temporary setback or part of a longer slowdown.

For now, the data point to a difficult trade-off: Buyers may have more homes to choose from, but elevated borrowing costs continue to limit the benefit of modest price relief.

Sources

• U.S. Census Bureau and HUD, Monthly New Residential Sales, July 2026
• Freddie Mac, Primary Mortgage Market Survey, Aug. 27, 2026
• Associated Press, Average rate on 30-year mortgage hits 6.66% this week
• KPMG Economics, Housing market treads water