New-home sales came in above analysts’ expectations in July despite posting monthly and yearly declines, while the level of new homes on the market remained elevated. 

Specifically, newly built homes were sold at a seasonally adjusted annual rate of 652,000, well above the consensus estimate of 630,000.  

July’s rate was down 0.6% from June’s upwardly revised 656,000 estimate and down 8.2% from the July 2024 rate of 710,000, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.     

Months’ supply of new homes for sale in July was 9.2 months, the same as June and 16.5% more than the July 2024 level of 7.9 months. 

The median sales price for a new home was $403,800, which was down 0.8% from the June price of $407,200 and 5.9% below the July 2024 price of $429,000.      

“Builders have relied heavily on incentives, such as mortgage-rate buydowns, upgrades and even price reductions, to support demand and maintain an edge over the existing-home market,” First American Financial Deputy Chief Economist Odeta Kushi said. “However, the recent pattern of sales — holding at relatively subdued levels — suggests these measures are becoming less effective amid strained affordability, rising resale inventory and macroeconomic uncertainty.”