New-Home Sales Drop in April as Mortgage Rates Stay Elevated

Sales of newly built homes dropped in April while prices climbed, as the housing market continues a roller-coaster ride in 2026.

Contract signings for newly built homes fell to a seasonally adjusted annual rate of 622,000 in April, down 6.2% compared to March, the U.S. Census Bureau and Department of Housing and Urban Development reported on Thursday. That's 11.3% below the 701,000 pace in April 2025.

New-home prices, though, rose to $422,500. That's 8% above the median sales price of a new house in March, and 2.2% above April 2025.

However, the average sales price was $508,000, which is 0.7% above March and 1.1% below April 2025. Average sales prices generally better reflect large outliers such as very expensive homes.

It's been a bumpy year for home sales. January saw a sharp decline in sales—the biggest drop in 13 years—while the numbers improved in February and March. It comes at a time when the 30-year fixed rate remains high. It averaged 6.53% on Thursday, compared to 6.51% May 21, according to Freddie Mac.

Home prices are moderating in many cities, according to data from the S&P Cotality Case-Shiller Index released earlier this week. That meant sharper declines in home prices in Seattle, but many other cities are seeing the same thing.

Affordability worries

Realtor.com® senior economist Joel Berner blames higher mortgage rates and lower consumer confidence for the drop. New-home sales in the first third of the year are 6.5% below what they were in 2025.

"The new-home market is strongly in buyer's territory," Berner says. That could end up incentivizing developers to cut back on construction of new homes.

Only the West saw an upward trend in sales price, rising 18.7% from March to April, Berner says. Homes there are generally more expensive. Meanwhile, the more affordable Midwest saw a 25% slowdown, the Northeast a 12.9% decline, and the South a 9.8% drop.

The National Association of Home Builders expects the entire year to go the same way: On track to decline while mortgage rates remain elevated. Despite the challenges of mortgage rates and gas prices, NAHB Chief Economist Robert Dietz said he's watching the more affordable Midwest as a "bright spot."

Bankrate senior economic analyst Mark Hamrick suggested, though, that the trend could ultimately benefit buyers in more ways. Developers don't want to hold on to homes longer than needed, which means they will likely maintain the trend of offering incentives.

"However, the flexibility for builders varies by scale: Large public builders have the deep-pocketed tools to offer aggressive mortgage rate buydowns and concessions, whereas smaller regional builders operate on tighter cash flows and face much tougher choices in moving inventory," Hamrick said.