New Home Sales Drop 0.6 Percent

Yesterday, I noted New Home Sales Drop 0.6 Percent from Bigger Upward Revision

New home sales remain stuck in a broad range. Median and average prices decline.

Today’s spotlight is on price.

Sales Price

• The median sales price of new houses sold in July 2025 was $403,800. This is 0.8 percent (±5.9 percent) below the June 2025 price of $407,200, and is 5.9 percent (±8.5 percent) below the July 2024 price of $429,000.
• The average sales price of new houses sold in July 2025 was $487,300. This is 3.6 percent (±8.0 percent) below the June 2025 price of $505,300, and is 5.0 percent (±8.6 percent) below the July 2024 price of $513,200.

Home prices generally don’t start to fall except the period prior to recessions and in recessions.

New Homes Sold vs Sales Price

Steadily Falling Median Home Price

The median price of a new home has been falling steadily from 460,300 in November of 2022 to 403,800 in July of 2025.

That’s a decline of 12.3 percent. But that does not tell the full story.

Builders are cutting corners and offering discounts to make homes appear affordable.

Median and average home prices do not adjust for square footage, number of rooms, lot size, pools, or amenities.

New Home Median and Average Price

Since April of 2023, year-over-year home prices have been mostly negative.

New Home Sales Annualized vs Homes for Sale

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The supply of new homes for sale is pressuring prices and incentives.

New Homes for Sale by Stage of Construction

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One of the factors pressuring home prices is the supply of builder speculative homes.

Builders are sitting on a supply of 121,000 completed homes with another 267,000 started but unsold homes.

Blame the Fed for wild swings in housing affordability.

I discussed this in Fedthink! The Fed Is Incompetent by Design and Can’t Be Fixed

Today’s Pertinent Conclusion

We are trapped in “Fedthink”, especially the nonsensical proposition that two percent inflation is a good thing despite the fact that the Fed is clueless on how to measure inflation in the first place.

The Greenspan Fed, Bernanke Fed, Yellen Fed, and the Powell Fed all ignored housing prices as a measure of inflation.

Yellen even wanted to make up for lack of not enough inflation.

The Housing Top Is Likely In, Case-Shiller Home Prices Drop Again

On July 29, 2025, I commented The Housing Top Is Likely In, Case-Shiller Home Prices Drop Again

Prices are now down the third consecutive month. [But it does not even register on a chart.]

Demographically, the upcoming boomer die-off will add tremendous supply to the housing market. Shutting down the border will slow the rate of current demand.

Related Posts

August 22, 2025: Existing-Home Sales Rise 2 Percent to Nowhere, Expect Steep Price Declines

NAR-reported median prices will now decline for many months.

August 23, 2025: It’s Now Twice as Expensive to Buy an Entry-Level Home than Rent

Thinking of buying a starter home? Be careful!

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