U.S. New Home Sales Inch Higher Amid Market Weakness, Defying Expectations

U.S. new home sales rose slightly to 627,000 in June, lower than the expected 645,000. Sales declined 6.6% compared to June last year. The housing market continues to struggle with high prices and reluctant buyers. Existing-home sales fell 2.7% in June to their lowest level this year.

U.S. new home sales rose slightly in June, reaching an annualized rate of 627,000, but this figure fell short of the expected 645,000 units. The sales figure represents a 6.6% decline compared to June last year, indicating a continued struggle in the housing market [2].

Existing-home sales also fell, dropping 2.7% in June to their lowest level this year. This decline was driven by higher mortgage rates and economic uncertainty, which have kept potential buyers on the sidelines [1]. The housing market remains sensitive to interest rates, with a prolonged decline potentially spilling over into the broader economy [1].

The inventory of existing homes increased by 15.9% in June, reaching 1.53 million units. At the current sales pace, it would take 4.7 months to exhaust the inventory, up from 4.0 months a year ago. While a four-to-seven-month supply is considered healthy, the balance between supply and demand remains a concern [1].

The median price of existing homes rose 2% to a record high of $435,300 from a year ago. However, home prices in the Washington, D.C. metro region, which has been hard hit by the Trump administration's spending cuts, showed a significant slowdown, with prices rising just 2.9% [1].

In contrast, new home sales remained weak in June, with the supply of new homes for sale increasing to 511,000, the highest level since 2007. The median sales price of a new home decreased by 2.9% from a year ago, marking the fifth annual decline in the last six months. Despite the decline, new-home prices remain more than 23% higher than at the onset of the pandemic [2].

The housing market is likely to face continued challenges in the coming months, with sales expected to move sideways before recovering in 2026 as the Federal Reserve begins to cut rates in earnest [1]. The market is currently grappling with high prices and reluctant buyers, with first-time buyers accounting for only 30% of sales [1].

References:
[1] Reuters. (2025, July 23). U.S. existing home sales hit nine-month low in June. Retrieved from https://www.reuters.com/world/us/us-existing-home-sales-hit-nine-month-low-june-2025-07-23/
[2] Bloomberg. (2025, July 24). U.S. new home sales increased by less than forecast in June. Retrieved from https://www.bloomberg.com/news/articles/2025-07-24/us-new-home-sales-increased-by-less-than-forecast-in-june