The new home market is starting to lose steam, as homebuilder concessions are failing to offset homebuyers’ mounting economic and political anxieties.
New residential home sales fell 11.3 percent year over year to a seasonally-adjusted annual rate of 622,000, according to the US Census Bureau’s April report. The estimate of new homes for sale at the end of the month declined 2.2 percent annually to 489,000, representing 9.4 months of supply at the current sales pace. The median sales price rose 2.2 percent to $422,500 — up from the April 2025 median sales price of $413,600.
Lisa Sturtevant
Bright MLS Chief Economist Lisa Sturtevant said homebuilders have been able to leverage weakness in the existing-home market to buoy sales. However, homebuyers are even starting to pull back from the new-home market as socio-economic volatility continues to tick up.
“New home sales had been steady as the inventory of existing homes remained limited in many markets and home builders were able to offer rate buydowns and other concessions to attract home shoppers,” she said in an emailed statement. “But the housing market has become more challenging this spring.”
“Overall home builder confidence has ticked up slightly, but builders are still concerned that home buyers are going to hold back amidst rising inflation concerns, higher mortgage rates, and the ongoing uncertainty in the Middle East,” she added. “The Census Bureau reported earlier this month that new single-family starts fell in April, an indication of caution among home builders.”
Realtor.com Senior Economist Joel Berner said April’s performance was a disappointing turn of events, following a robust March in which new residential sales rose 3.3 percent year over year to a seasonally adjusted rate of 682,000.
Joel Berner
Berner said rising mortgage rates, which averaged 6.38 percent, suppressed homebuyer confidence in April. Homebuilders are already responding to the dip in activity by slowing single-family spec building in slower markets and regions.
“Only the West region saw an upward trend (+18.7 percent) from March to April, and the new homes in this region tend to be more expensive,” he said in an emailed statement. “The Midwest saw a major month-over-month slowdown (-25.0 percent) and the Northeast (-12.9 percent) and South (-9.8 percent) were close behind.”
“The number of completed homes for sale held basically steady month over month, but the number of unstarted homes for sale reached its highest level in at least a year,” he added.
The Realtor.com economist said the “malaise of homebuyers” will likely continue, pushing sales metrics lower. However, homebuyers who decide to conquer their anxieties might be richly rewarded with more compelling incentive packages.
“Expect builders to continue to pull back on single-family home construction if sales remain weak, and expect more price reductions and buyer incentives to be offered to sweeten the deal for reluctant buyers,” he said.
