Sales of newly built homes fell 10.5% in July to a seasonally adjusted annual rate of 607,000, and the median price of a new home dropped to $393,800, according to the joint report from the Census Bureau and Department of Housing and Urban Development. Builders are now sitting on 9.6 months of unsold supply at the current sales pace, the clearest sign yet that new construction is outpacing buyer demand.
Key Numbers
- New home sales: 607,000 annualized units, down 10.5% from June’s 678,000 rate
- Year-over-year: down 6.3% from July 2025’s 648,000 rate
- Median price: $393,800, down 2.3% from June’s $403,100 and down 0.9% from a year earlier
- Months’ supply: 9.6 months at the current sales rate
- Homes for sale: 488,000, up 1.9% from June but down 1.6% year-over-year
A Pricing Split That Signals Discounting
The median price, the point at which half the homes sold for more and half for less, fell for the second straight month, landing 2.3% below June’s figure. But the average sales price, which is skewed upward by high-end builds, actually rose 4.1% to $508,800. That divergence usually means builders are moving more of their entry-level and mid-tier inventory through price cuts and incentives, while a smaller number of larger, pricier homes still close at full value, pulling the average in the opposite direction of the median.
Nearly Ten Months to Clear the Shelves
The 9.6-month supply figure is the number housing economists watch most closely: anything above six months typically signals a market tilted toward buyers, since builders historically consider that level roughly balanced. At the July sales pace, it would take builders the better part of a year to sell through the homes currently completed, under construction or not yet started that make up their current inventory pipeline, based on the Census data.
Where the Sales Happened
Regionally, the South accounted for the bulk of new-home activity at an annualized 383,000 units, followed by the West at 138,000, and the Northeast and Midwest tied at 43,000 each, per the same Census report. The South’s outsized share reflects both its larger population base and the concentration of large-scale builders operating there, but it also means any pullback in Southern demand carries outsized weight on the national sales figure.
New-home sales are tracked separately from resales of existing homes, and the two measures often move differently: existing-home sales reflect homeowners listing properties they already occupy, while new-home sales measure builders moving freshly constructed inventory. That makes July’s decline a distinct read on how much appetite remains for ground-up construction heading into fall.