The good news is that new-home sales in June ticked up slightly compared to May. The bad news is they’re still running at a significantly lower pace than a year ago.
According to the monthly report released Thursday by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD), new-home sales in June registered at a seasonally adjusted annual rate of 627,000, up 0.6% from the revised May tally but 6.6% below the pace posted in June 2024.
The poor sales numbers for homebuilders come despite a much-needed infusion of inventory. Homes for sale landed at 511,000 in June, significantly higher than any point in the past year. Months of supply (9.8) is at its highest level since November 2022.
“Another day, another disappointing home sales figure,” Heather Long, chief economist for Navy Federal Credit Union, said in a statement. “New home sales in June came in lower than expected. The encouraging news is there are more new homes for sale this summer than last year, but it will take a lot more relief to see the real estate market unfreeze.”
Slow sales and rising inventory have provided some price relief for buyers, as the median price fell to $401,800, down from $414,000 one year ago and the lowest figure since reaching $397,000 in November 2024.
The month-over-month rise was driven by a rebound in the South, which accounts for more than half of all new-home sales. Sales there jumped from 371,000 in May to 390,000 in June. But that still represents a drop of 5.1% relative to last year.
The West and Northeast regions each experienced dramatic declines on both a monthly and yearly basis. The Midwest was a bright spot with a 6.3% monthly rise and a 9% year-over-year gain.
The new-home sales report is another bad signal in a recent string of them, as high prices and stagnant mortgage rates continue to stymie the market. Existing-home sales in June fell below 4 million despite a similar rise in inventory.
Home prices and mortgage rates aren’t the only headwind for builders. The trade war threatens to raise prices for construction inputs, although D.R. Horton and PulteGroup each said on earnings calls this week that tariffs haven’t been a major problem so far.
But economic uncertainty has consumer confidence near historic lows, while homebuilder confidence is also shaky, sitting at levels similar to those at the start of the COVID-19 pandemic and the aftermath of the 2008 financial crisis.
“It is a very different housing market than it was just a year ago,” Bright MLS chief economist Lisa Sturtevant said in a statement. “Builders are facing a very different economic climate in 2025. Year-to-date, new home sales are tracking far below last year’s level and there is nothing to suggest a rebound in the new home sales market in the second half of 2025.”