New-Home Sales Fall in May
After an uptick in new-home sales over the last several months, sales of newly constructed homes dropped in May. According to housing market platform Realtor.com, sales for new homes were down by 6.3% from a year ago. From April, signed contracts for new single-family homes fell by 13.7% to a seasonally adjusted annual pace of 623,000, acording to U.S. Census Bureau data reported by Realtor.com.
New-home sales have been slow despite 37% of builders saying they cut prices to incentivize buyers, as home prices still remain elevated above what most households can afford. The median sales price of a new house sold in May was $426,600, which is up by 3.7% from April and up by 3% from the prior year.
As new-home sales slow, inventory piles up
Buyer demand has weakened in recent months, causing the supply of new homes available for sale to grow. At the end of May, there were an estimated 507,000 new-construction homes for sale nationwide, which is up by 1.4% from April and by 8.1% from one year ago. At the current pace of sales, this represents 9.8 months of supply, which is the highest rate in nearly three years.
New-home sales decline in nearly every region of the U.S.
New-home sales fell month-over-month in every U.S. region except for the Northeast. At 21%, the South saw sales decline the most. At the same time, the supply of new-construction homes on the market in the South hit a new record of 311,000. This is the highest level for the region dating back to 1973.
The decline in new-home sales is a shift from the first half of 2025
- New-Home Sales Rise in April: In April 2025, new-home sales rose by 10.9% on a month-over-month basis and by 3.3% on a year-over-year basis.
- New-Home Sales Pick Up: From January to February 2025, new-home sales grew by 1.8%.