New home sales fell by an annualized rate of 11.3% in April as rising mortgage rates slowed down the number of buyers.
The new housing market is starting to lose momentum as concessions from home builders fail to offset the growing economic and political anxiety of home buyers.
The U.S. Census Bureau’s April report showed new home sales at a seasonally adjusted annual rate of 622,000 units, down 11.3% from a year earlier. At the end of the month, new home sales are forecast to decline 2.2% annually to 489,000 units, equivalent to 9.4 months of supply at the current pace of sales. Median sales price increased 2.2% to $422,500, up from April 2025’s median sales price of $413,600.
Lisa Sturtevant
Lisa Sturtevant, chief economist at Bright MLS, said home builders were able to take advantage of the weakness in the existing home market to boost sales. However, as socio-economic instability continues to increase, home buyers are starting to exit the new home market.
“New home sales were strong as existing home inventory remained limited in many markets and homebuilders were able to offer interest rate buydowns and other concessions to attract homebuyers,” he said in an emailed statement. “But the housing market has been much more challenging this spring.”
“While overall homebuilder confidence has increased slightly, builders remain concerned that homebuyers will hold back on home purchases amid rising inflation concerns, rising mortgage rates and continued uncertainty in the Middle East,” he added. “The Census Bureau reported earlier this month that new single-family starts fell in April, a sign of caution among home builders.”
Joel Varner, senior economist at Realtor.com, said April’s performance was a disappointing development after a strong March, when new home sales rose a seasonally adjusted 3.3% to 682,000 units from a year earlier.
joel burner
Berner said rising mortgage rates, which averaged 6.38%, held down homebuyer confidence in April. Home builders are already responding to the drop in activity by slowing the construction of single-family homes in markets and regions with economic downturns.
“The western region was the only region that saw an upward trend (up 18.7%) from March to April, and new homes in this region tend to be more expensive,” he said in an emailed statement. “The Midwest saw the largest month-over-month slowdown (-25.0%), followed closely by the Northeast (-12.9%) and South (-9.8%).”
“While the number of completed homes for sale was essentially flat month-over-month, the number of unbuilt homes for sale reached its highest level in at least a year,” he added.
Economists at Realtor.com said “homebuyer anxiety” is likely to continue and sales metrics will decline. But homebuyers who decide to overcome their fears can be rewarded handsomely with more attractive incentive packages.
“We expect builders to continue to pull back from building single-family homes if weak sales continue, and we expect further price reductions and buyer incentives to be offered to sweeten the deal for reluctant buyers,” he said.
Email Marian McPherson
