Elevated borrowing costs, rising inflation and broad economic uncertainty continue to curb buyer demand and hold back new home sales.

Sales of newly built single-family homes declined 10.5% in July to a seasonally adjusted annual rate of 607,000, following a sharply upwardly revised June estimate, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales was 6.3% lower than a year earlier per the July data. The July sales pace was the slowest since January of this year. Mortgage rates increased from 6.1% to above 6.6% from January to July.

NAHB surveys show that a majority of builders continue to offer sales incentives, including mortgage rate buydowns, to support new home sales. Despite these efforts, the single-family home building market is on track for a second consecutive annual decline in 2026. New home sales are down more than 4% on a year-to-date basis. Nonetheless, NAHB surveys show community builders continue to outperform the broader market.

New single-family home inventory in July rose to 488,000 units, up 1.9% from June, and down 1.6% compared to a year ago. This represents an elevated 9.6 months’ supply at the current building pace, the highest measure since January.

While overall new single-family inventory increased in July, the composition of that inventory continues to change. The number of completed, ready-to-occupy new single-family builds has fallen from a non-seasonally adjusted 132,000 at the start of 2026 to 114,000 in July, as builders slowed the pace of construction. Homes in inventory and under construction have increased from 247,000 in January to 262,000 in July. And homes not started construction but available for purchase increased from 96,000 in January to 119,000 in July.

Combined new and existing home inventory continues to rise, per NAHB estimates. Summing new and existing single-family homes available for sale, and adjusting by the weighted sales rate for each housing market, combined new and existing home months’ supply inventory increased to a slightly above balanced level of 5.3 in July. As noted on the graph below, this marks the highest combined months’ supply measure since late 2014.

The median new home sales price in July fell 2.3% from June to $393,800 and was down 0.9% from a year ago. The new home sales market is showing relative strength at the higher end of the market. The market share of new home sales priced above $800,000 increased from 5% a year ago to 8% in July. 

Regionally, on a year-to-date basis, new home sales are up 8.8% in the Northeast but fell in the other three regions, with declines of 6.4% in Midwest, 3.7% in the South and 6.4% in the West.