New home sales slowed in July 2025, falling to an annual rate of 652,000 units, down 0.6% from June and 8.2% lower than a year earlier.
Inventory levels rose to 499,000 homes for sale, a 7.3% increase from July 2024, pushing supply to 9.2 months—the highest in more than a year.
Prices declined as market pressures mounted, with the median sales price slipping to $403,800, nearly 6% below July 2024 levels.
The U.S. housing market continued to lose momentum in July, as new home sales slipped while inventories climbed to their highest levels in more than a year, according to data released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.
New single-family home sales in July 2025 fell to a seasonally adjusted annual rate of 652,000 units, down 0.6% from June’s revised pace of 656,000. Compared with the same month a year earlier, sales were off 8.2%, reflecting a broader slowdown in buyer demand amid elevated mortgage rates and affordability concerns.
While sales have softened, the number of new homes available on the market is climbing. At the end of July, there were 499,000 houses for sale, a 7.3% increase from July 2024.
Big rise in inventories
That level translates into a 9.2-month supply of homes at the current sales rate, up sharply from 7.9 months a year earlier. The supply measure, closely watched by economists as a gauge of market balance, has been trending higher throughout 2025, suggesting that builders are facing more difficulty moving inventory.
The combination of slower sales and rising inventory is putting pressure on prices. The median sales price of new houses sold in July fell to $403,800, down 0.8% from June and nearly 6% below the year-earlier level of $429,000. The average sales price also declined, dropping 3.6% month over month and 5% year over year to $487,300.
Market outlook
Analysts say the latest figures highlight the shifting dynamics in the housing market. While new home construction has boosted supply, affordability challenges and cautious buyers are limiting sales, leading to an accumulation of inventory. If the trend persists, price adjustments could deepen in the coming months, providing some relief for prospective buyers but straining homebuilders’ margins.