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What happened this month
New-home sales slowed in April after March’s acceleration. The number of new homes sold fell 6.2% month over month and 11.3% year over year. April came in as the weakest month of new-home sales in the past year, except for January, when winter storms slowed the market dramatically. Higher mortgage rates and lower consumer confidence are to blame for the poor performance this month. Year to date, new-home sales have come in 6.5% below 2025 levels. In a notable reversal from last month, the median sale price for new homes rose to $422,500, an 8.0% increase from March. This is the highest median sales price for new homes since May 2025. The slowdown in sales pace has pulled up the months’ supply in the new-home market to 9.4 from 8.7 in March and 8.6 last April. The new-home market is strongly in the buyer’s territory.
The pickup in median sales price can be explained by the regional mix of sales. Only the West region saw an upward trend (+18.7%) from March to April, and the new homes in this region tend to be more expensive. The Midwest saw a major month-over-month slowdown (-25.0%), with the Northeast (-12.9%) and South (-9.8%) close behind. The broad slowdown in sales is likely encouraging builders to cut back on new construction activity for single-family homes.
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A smaller share of completed new homes is on the market
The number of completed homes for sale held basically steady month over month, but the number of unstarted homes for sale reached its highest level in at least a year. Builders are reining in spec building activity in the slower sales market and choosing to market plans to prospective buyers instead to guarantee buyers for the homes they build.
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What does this mean for buyers and builders?
April was a disappointing month for new-home sales after March showed so much promise. The malaise of homebuyers seems to be pervasive in the market, leading to fewer transactions even as conditions favor buyers. Expect builders to continue to pull back on single-family home construction if sales remain weak, and expect more price reductions and buyer incentives to be offered to sweeten the deal for reluctant buyers.
