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In August, new home sales bounced back, climbing 6.4% from July to a seasonally adjusted annual rate of 684,000, according to Realtor.com’s latest update.
Here’s what they report:
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Sales improved, but not enough to match last year: August's pace was 2.0% below August 2025, though an upward revision to July suggests the market may be steadying.
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Prices are falling: The median new home sold for $393,700, down 5.8% year over year and below the median for existing homes.
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The Midwest and South led the regions: Midwest sales jumped 84.9% from July and 22.5% from last year, and the South posted its best month since November. The Northeast and West fell 20.7% and 26.8% year over year. Because more of the sales came from less expensive regions, the national median price was pulled lower.
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Inventory is shrinking as builders pull back: There were 483,000 new homes for sale at the end of August, 2.0% fewer than a year ago, and months of supply dropped from 9.0 to 8.5.
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Buyers still have the upper hand: Builders are offering mortgage rate buydowns, cash at closing, and free upgrades, and they are cutting prices more often than sellers of existing homes.
MY TAKE
The most interesting number in this report isn't the sales rebound. It's that a brand-new home now costs less than a used one: the median new home sold for $393,700, below the median for existing homes. Builders can buy down mortgage rates, add upgrades, and cut prices, while homeowners with cheap mortgages from a few years ago are stuck. This trend will put downward pressure on existing home sellers in the coming months.
Until Next Week,
Ken
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