New Home Sales Tick Up in June Despite Elevated Mortgage Rates

Sales of new-construction homes bumped up a bit in June, as median sales prices slid and gave buyers an affordability boost.

Contract signings for newly built homes hit a seasonally adjusted annual rate of 628,000 in June, 1.5% up from May, according to data released by the U.S. Census Bureau and Department of Housing and Urban Development Friday. That's 5.6% below where they were in June 2025, when they hit 665,000 annualized.

Meanwhile, the median sales price dropped to $398,000, 3.3% below May's $412,000 median price and 2.7% below what it was in June 2025.

Just about every region showed a bump in home sales, the data show. The exception was a significant drop in the West, which saw a 22.4% drop month over month and 24.6% year over year.

The data gives a timely insight into the state of the housing market and shoppers' willingness to buy.

The uptick comes after new-home sales fell 7.3% monthly in May. May's median sales price of $424,900 was up 2% from April's $416,500, and about the same as a year ago. Meanwhile, construction activity on new single-family homes also retreated in May.

The housing market has faced its share of strains amid high mortgage rates and inflationary pressures.

The 30-year fixed rate mortgage averaged 6.49% in June, according to Freddie Mac. That was the highest monthly average since August 2025, and rates have continued to climb for most of July.

Realtor.com® economist Joel Berner says the first half of the year has shown the challenges in the housing market, but also how those challenges are hitting regions differently.

"Builders are facing a challenging set of circumstances as their costs continue to rise at the same time that competition from the existing home sector grows and buyer confidence wanes," Berner says.

Rocky road

The Midwest remains a bright spot for affordability, with sales in the first half about 2.5% up from 2025. Housing supply is generally more constrained there, and so new homes are selling better there. The same is true in the Northeast, where sales are up 17.2% year over year.

The West, meanwhile, is down over 10%. In that part of the country, there is more competition between builders and sellers of existing homes. There are 11.7% more homes for sale now than there were before the COVID-19 pandemic, and the buyer pool is pinched by affordability concerns. So the homes that do sell are commanding lower prices.

Buyers, meanwhile, are in a bind thanks to the rising cost of living. That's made them cost conscious, even despite the generous incentives builders are offering to get homes to sell. Builders, in turn, are pulling back on new construction activity to make up for the tighter margins.

PulteGroup CEO Ryan Marshall said as much in the company's earnings call Wednesday. He noted consumer activity across all regions were hit by macroeconomic uncertainty and global tensions as well as interest rates.

But the homebuilder expects the incentives it had to offer at the beginning of the year as a "high water mark" and aims to cut its speculative homebuilding, for instance, in favor of custom builds.

"Our expectation is that the market's going to continue to remain competitive, and that we're going to continue to see elevated incentive loads," Marshall said.

This leaves homebuyers a choice. With uncertainty likely to continue this year, the housing market will be soft. That could be an opportunity for them.

"For buyers willing to buck the trend of homebuying pessimism, new construction offers a chance for a great deal," Berner says. "Incentives and price reductions abound, and buying new can save money in the long run as well."