US new home sales top estimates at 628K as builders cut prices

US new home sales rose for the first time in three months in June, driven by the steepest price cuts in over two years.

Builders slashed median prices 2.7% from a year ago to $398,300 — the lowest since March 2024 — to clear inventory, pushing June new home sales to a 628,000 annualized pace that topped the 607,000 consensus estimate in a Bloomberg survey.

"Texas builders continue to adjust to cope with the affordability issue," said Ben Caballero, CEO of HomesUSA.com. "Prices increased modestly, but lower sales and pending sales show that elevated mortgage rates remain a significant obstacle."

The 1.6% month-over-month gain snapped two consecutive monthly declines and exceeded all 12 economist forecasts tracked by Bloomberg. Still, the inventory overhang persisted at 485,000 units, representing 9.3 months of supply at the current sales rate — well above the five-to-six-month range that signals a balanced market. The median sales price of $398,300 was down 2.7% year-over-year, the steepest annual decline since early 2024.

The data shows a divided market: builders are moving units through aggressive discounting, but underlying demand remains constrained by elevated financing costs. The average rate on a 30-year fixed mortgage stood at 6.55% in mid-July, according to Freddie Mac, more than double the pandemic-era lows. D.R. Horton Inc., the largest US homebuilder by volume, cut its 2026 sales guidance earlier this month, a sign that even price cuts may not fully offset affordability headwinds.

Regional data showed divergent trends. In Texas, new home sales slipped to 6,262 in June from 6,339 in May, with the average price rising 1.9% month-over-month to $426,171, according to HomesUSA.com. Pending sales — a forward-looking indicator — fell 7.1% statewide to 6,564. Florida posted stronger momentum, with Realtors closing 26,036 single-family home sales in June, up 9.3% from a year earlier, while the median price hit a record $432,000, Florida Realtors data showed. The Miami-Fort Lauderdale-West Palm Beach metro area led with a 22.9% jump in closed sales.

The national inventory of 485,000 new homes for sale was down 3.2% from a year ago, but the months-of-supply metric at 9.3 remains elevated relative to historical norms. Builders have responded by slowing new construction starts to work through the backlog of spec homes — units built without a signed buyer. The NAHB/Wells Fargo Housing Market Index, a measure of builder confidence, fell back to this year's low earlier in July, reflecting the sector's cautious outlook.

Barring a sharp decline in mortgage rates, the housing recovery is likely to remain uneven. CBRE Research projects 7,500 to 8,500 new US homes will be sold in 2026, a moderation from the above-trend 10,815 units in 2025. The next test for the market comes with the Federal Reserve's Sept. 16-17 meeting, where any shift in rate policy could reshape buyer demand.

This article is for informational purposes only and does not constitute investment advice.