Volatile Spring Selling Season Continues
The Census estimate of new home sales posted an unexpected gain in April even as builders and consumers continue to deal with economic uncertainty, elevated interest rates and rising building material costs.
Sales of newly built, single-family homes in April increased 10.9% to a 743,000 seasonally adjusted annual rate from a downwardly revised March number, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in April was up 3.3% compared to a year earlier.
“The April new home sales figure appears to be an anomaly, as builder sentiment moved markedly lower in May,” said Buddy Hughes, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Lexington, N.C. “A more reliable look would be the year-to-date figures, which show new home sales are down 1.2% on elevated interest rates, ongoing policy uncertainty and rising construction costs.”
“Rising inventory in the resale market is likely to place pressure on both pricing and sales activity for home builders during the second half of the year,” said NAHB Chief Economist Robert Dietz. “The April new home data reflects this as new home inventory is leveling off near a half million of residences marketed for sale, up just 1.6% from January.”
To further illustrate the challenges builders are facing during the spring home buying season, Dietz added that as of May, 61% of home builders are using various kinds of sales incentives, including mortgage rate buydowns, to facilitate sales due to lackluster demand.
A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the April reading of 743,000 units is the number of homes that would sell if this pace continued for the next 12 months. This estimate may be revised lower next month.
New single-family home inventory has leveled off in 2025, with 504,000 residences marketed for sale as of April. While this is 8.6% higher than a year ago, it is only 1.6% higher from January. At the current sales pace, the months’ supply for new home stands at 8.1 compared to 7.7 a year ago.
The median new home sale price in April was $407,200, compared to $415,300 a year ago.
Regionally, on a year-to-date basis, new home sales are down 32.5% in the Northeast, 14.8% in the Midwest and 2.4% in the West. Sales are up 5.7% in the South.