US new-home sales fall to six-month low as mortgage rates rise

New single-family home sales in the US tumbled to a seasonally adjusted annual rate of 607,000 in July, according to joint data from the Census Bureau and HUD released on August 25. That’s a 10.5% decline from June’s revised figure of 678,000, and the weakest reading since January.

Economists had expected something in the range of 615,000 to 620,000. The actual number came in below even the low end of that consensus. Year-over-year, sales fell 6.3% from 648,000 in July 2025.

Mortgage rates quietly tightened the squeeze

The 30-year fixed mortgage rate averaged roughly 6.54% in July, up from 6.49% in June. Applications for new-home purchases declined year-over-year, per MBA estimates.

The regional picture wasn’t evenly distributed. Weakness concentrated in the Midwest and South, two markets that had previously benefited from relative affordability compared to coastal metros.

Builders are adapting, but inventory keeps climbing

The median sales price of a new home slipped to $393,800, down 2.3% from the prior month. The average price came in at $508,800, a gap that reflects the wide range of product hitting the market, from starter homes to higher-end builds.

Despite those efforts, inventory of new homes available for sale climbed to 488,000 units at the end of July. At the current sales pace, that translates to a 9.6-month supply. For context, a balanced market is typically considered to be around six months of supply.

The next new-home sales report is scheduled for September 24.

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