New house sales finished 2025 on a mixed but resilient note, indicating stable underlying demand despite persistent affordability and supply challenges.
The most recent data released today (and delayed due to the government shutdown in the fall of 2025) show that, while month-to-month activity is down somewhat, sales are still higher than a year ago, indicating that buyer interest in newly built homes has increased.
According to the December NAHB/Wells Fargo Housing Market Index, 67 percent of builders used sales incentives, the highest rate seen since COVID.
During December, builders offered a 5% average reduction in home prices.
According to the U.S. Department of Housing and Urban Development and the United States Census Bureau, sales of newly built single-family houses fell 1.7 percent month on month in December to a seasonally adjusted annual rate of 745,000 units.
This was a 3.8 percent rise over the previous year. In 2025, an expected 679,000 residences were sold, a 1.1% decrease from 686,000 in 2024.
A new house sale is documented when a contract is signed or a deposit is accepted, regardless of the state of construction.
The seasonally adjusted annual rate represents the rate of sales over a 12-month period if current conditions persisted.
In December, new single-family home inventories was 472,000 units, 2.7 percent lower than the previous month and 3.5% lower than a year ago.
At the current sales pace, the months’ supply of new homes remained at 7.6 months, down from 8.2 months a year ago but still above the six-month threshold that is deemed balanced.
In recent months, the combined new and existing house inventory has crept lower, with total months’ supply falling to 4.0, indicating weaker development activity.
Meanwhile, inventory conditions in the existing house market have declined after gradually improving in previous months.
Prices in both markets have moderated, supporting buyer interest despite continued affordability worries.
On a non-seasonally adjusted basis, there were 128,000 completed, ready-to-occupy homes for sale by the end of 2025, up 8.5% from the previous year.
Completed homes made up little more than a quarter of the entire inventory, with homes under construction accounting for 51%. The remaining 22 percent of homes sold in December had not begun building when the sales contract was signed.
In 2025, home prices showed symptoms of further dropping. The typical new home sale price dropped 1.3 percent to $415,000 from $420,300 in 2024.
Affordability has improved at the bottom end of the market, with 20% of new houses priced below $300,000.
Thirty-four percent of homes cost more than $500,000, with the remaining 46 percent priced between $300,000 and $500,000.
Year-over-year new house sales increased 1.7% in the Midwest and 0.4% in the South, but fell 4.9 percent in the West and 7.7% in the Northeast.
[Read more about this topic on Eyeonhousing.org]