America’s new home market is showing fresh signs of strain, with sales plunging in July even as the typical price of a newly built house fell to its lowest level in five years.
The median sales price of a new home dropped to $393,800 last month, down 2.3 percent from June and the lowest figure recorded since July 2021, according to newly released data from the U.S. Census Bureau and Department of Housing and Urban Development.
But while the falling price tag may sound like good news for would-be homeowners, there is a catch: buyers are still staying away in large numbers.
New-home sales fell to a seasonally adjusted annual rate of 607,000 in July, a dramatic 10.5 percent drop from June’s revised rate of 678,000 and 6.3 percent below the same month last year.
The July figure was also the slowest sales pace since January.
The figures paint a picture of a housing market caught in an uncomfortable squeeze. Buyers are reluctant to commit while mortgage rates remain elevated, while builders are increasingly offering discounts and incentives to tempt those who are still shopping.
And for consumers who can afford to buy, it could create an unusually favorable negotiating environment.
The latest Census figures show there were an estimated 488,000 new homes for sale at the end of July, up 1.9 percent from June, although still 1.6 percent below July 2025.