Political Calculations' initial estimate of the total market capitalization of new homes sold in the United States ticked up again in June 2025. The first estimate of the time-shifted trailing twelve month average of the total value of new homes sold during the month is $29.37 billion.

This figure represents an increase of 3.1% from our revised estimate of $28.48 billion in new homes sales in May 2025. The May 2025 data was revised downward from the initial estimate of $28.86 billion we presented in the previous edition of this series.

The following charts present the U.S. new home market capitalization, the number of new home sales, and their sale prices as measured by their time-shifted, trailing twelve month averages from January 1976 through June 2025. The data through June 2025 indicates the new home market cap is rising mainly due to a rising trend in sale prices as the number of sales is trending downward.
 

New home sales in a falling trend:
 

Rising trend for home prices:
 

Reuters indicates the number of new homes for June 2025 was less that expected:

Sales of new U.S. single-family homes increased less than expected in June amid higher mortgage rates, pushing inventory to levels last seen in late 2007, which could keep homebuilding subdued.

New home sale units rose 0.6% to a seasonally adjusted annualized rate of 627,000 units last month, the Commerce Department's Census Bureau said on Thursday. The sales pace for May was unrevised at a rate of 623,000 units.

Economists polled by Reuters had forecast new home sales, which make up more than 10% of U.S. home sales, would rise to a rate of 650,000 units. New home sales, which are counted at the signing of a contract, are volatile on a month-to-month basis and subject to big revisions.

They fell 6.6% on a year-over-year basis in June. The average rate on the popular 30-year fixed-rate mortgage has hovered just under 7% this year after the Federal Reserve paused its interest rate cuts amid concerns that President Donald Trump's protectionist trade policy would stoke inflation.

Having mortgage rates hovering around the elevated 7% level has been a contributing factor to the ongoing sluggishness of the new home market. The prolonged new home affordability crisis is weighing on the business outlook for new homebuilders.

“Buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty,” said Buddy Hughes, NAHB chairman and a homebuilder from Lexington, North Carolina, in a release. “To help address affordability concerns and bring hesitant buyers off the fence, a growing number of builders are moving to cut prices.”

If there is a positive for new home affordability, it's that the number of unsold new homes is rising, with homebuilders increasingly taking steps to lower their prices as they attempt to increase sales. Through June 2025, those actions haven't yet been enough to change the recent uptrend in new home prices, but we'll see how well new homebuilders adapt with their changes in pricing strategy in the months ahead.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 24 July 2025. 

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 24 July 2025. 

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