New Home Sales Tick Up in June Amid High Mortgage Rates

New home sales in the United States edged higher in June after two consecutive months of declines, although elevated mortgage rates continued to weigh on affordability.Sales of new single-family homes rose 1.6 percent in June to a seasonally adjusted annual rate of 628,000, up from an upwardly revised rate of 618,000 in May, the U.S. Census Bureau said Friday.The annualized rate represents the number of homes that would be sold over a full year if June’s pace continued.The estimated monthly increase was within the survey’s margin of error.On a year-to-year basis, sales were down 5.6 percent from the 665,000-unit rate recorded in June 2025.New home sales data can be volatile and are frequently revised. May’s rate, for example, was revised sharply higher from the 580,000 units initially reported.According to the bureau, the median sales price fell to $398,300 in June, down 3.3 percent from $412,000 in May and 2.7 percent from $409,200 a year earlier.Lower-priced homes accounted for a larger share of the market. Homes selling for less than $300,000 represented 23 percent of June sales, up from 16 percent a year earlier.“New home sales are gaining some momentum at the more affordable range of the market, with homes priced below $300,000 accounting for 23 percent of June sales, up from 16 percent a year earlier,” Robert Dietz, chief economist at the National Association of Home Builders, said in a statement.“However, that price point is generally only achievable in markets with lower development and construction costs, particularly with respect to lower state and local regulatory costs,” he added.Preliminary regional estimates showed sales rising from May in the Northeast, Midwest and South by 3.6 percent, 2.5 percent and 9.9 percent, respectively.The West was the exception, recording a 22.4 percent decline.Through the first six months of the year, sales were up 2.6 percent in the Midwest but declined elsewhere.Sales fell 4.7 percent in the Northeast, 4.9 percent in the South and 10.1 percent in the West.Nationwide sales were down 5.2 percent over the same period.Mortgage Rates Remain a HeadwindThe housing market continues to face pressure from elevated borrowing costs and broader affordability challenges.The average rate on a 30-year fixed mortgage hovered around 6.5 percent in June, according to Freddie Mac.It subsequently increased from 6.43 percent in early July to 6.58 percent during the week ending July 23.“The pace of new home sales has remained constrained in recent months by elevated mortgage rates,” said Bill Owens, chairman of the National Association of Home Builders.Builders have increasingly turned to discounts and other incentives to support demand.An NAHB survey found that 62 percent of builders offered some form of sales incentive in June, while 35 percent reduced prices by an average of 6 percent.The number of new single-family homes available for sale was virtually unchanged at a seasonally adjusted 485,000 units in June, down 0.2 percent from May and 3.2 percent from a year earlier.At the current sales pace, that inventory would take an estimated 9.3 months to sell, compared with 9.4 months in May and nine months in June 2025.The elevated supply gives buyers more options while increasing pressure on builders to offer discounts or other concessions.The federal government counts a new home as sold when a deposit is accepted, or a sales agreement is signed.The property itself may be completed, under construction, or not yet started at the time of the sale.