- The American new home market is cooling, with softer sales, higher inventory, and falling prices reflecting the current slowdown.
The latest New Residential Sales report (June 2025) from the U.S. Census Bureau shows that the U.S. housing market is experiencing a slowdown in new single-family home sales, while inventory and supply have increased, and prices are declining.
As buyers balk at high home prices and mortgage rates that continue to approach 7%, a recent Oxford Economics report predicts more pain ahead. Concerns about the economy and job security mean many would-be new purchasers are opting to make do with modest home improvements instead.
Increased new home sales often indicate strong consumer confidence, greater employment, and accessible financing. Conversely, declines suggest waning buyer interest, affordability issues, or economic stress.
“There’s no question that in many of pockets of the Sun Belt—the epicenter of U.S. single-family homebuilding—buyers have gained a considerable amount of leverage this year and the market has softened,” ResiClub editor-in-chief Lance Lambert told Fortune Intelligence.
“In order to keep sales volumes steady, big homebuilders have compressed margins further and done bigger incentives or outright price cuts. Lennar is spending the equivalent of 13.3% of final sales price on incentive, like mortgage rate buydowns,” Lambert noted, up from 1.5% at the height of the Pandemic Housing Boom in the second quarter of 2022. In normal times, Lambert pointed out, Lennar spends 5% to 6% on buyer sales incentives. (Lennar is ranked no. 129 on the Fortune 500.)
Key points from the report:
- New home sales: Sales were at a seasonally adjusted annual rate of 627,000 in June 2025. This is only 0.6% higher than May 2025, but 6.6% lower than June 2024, indicating a notable year-over-year decline in buying activity.
- Inventory: At the end of June, there were 511,000 new houses for sale, a 1.2% increase…