(US, 26th) US new home sales in May saw the largest decline in nearly three years, as numerous sales incentives failed to effectively ease affordability constraints.
According to government data released on Wednesday (June 25), sales of newly built single-family homes fell by 13.7% to an annualized rate of 623,000 units, the lowest level in seven months. This figure was lower than all economists’ forecasts in a Bloomberg survey.
The latest data show that as mortgage rates hover around 7%, tariffs push up material costs, and the labor market slows, economic challenges are mounting and housing inventory continues to increase. Although builders have offered subsidies to lower home buying costs, their effect has gradually diminished, and many builders have slowed the pace of construction.
Bloomberg quoted Heather Long, Chief Economist at Navy Federal Credit Union, as saying: “This spring and summer’s real estate market is tough. Due to worries over uncertainty and high mortgage rates, buyers are choosing to wait and see.”
The report shows that in May, the inventory of new single-family homes for sale edged higher, hitting the highest level since 2007. At the current sales pace, this is equal to 9.8 months' supply. The number of completed homes for sale rose to 119,000 units, the highest level in nearly 16 years.
The median sale price climbed 3% year-on-year to $426,600, marking the first annual increase since 2025.
According to government data released on Wednesday (June 25), sales of newly built single-family homes fell by 13.7% to an annualized rate of 623,000 units, the lowest level in seven months. This figure was lower than all economists’ forecasts in a Bloomberg survey.
The latest data show that as mortgage rates hover around 7%, tariffs push up material costs, and the labor market slows, economic challenges are mounting and housing inventory continues to increase. Although builders have offered subsidies to lower home buying costs, their effect has gradually diminished, and many builders have slowed the pace of construction.
Bloomberg quoted Heather Long, Chief Economist at Navy Federal Credit Union, as saying: “This spring and summer’s real estate market is tough. Due to worries over uncertainty and high mortgage rates, buyers are choosing to wait and see.”
The report shows that in May, the inventory of new single-family homes for sale edged higher, hitting the highest level since 2007. At the current sales pace, this is equal to 9.8 months' supply. The number of completed homes for sale rose to 119,000 units, the highest level in nearly 16 years.
The median sale price climbed 3% year-on-year to $426,600, marking the first annual increase since 2025.