2025 new-home sales inched up; concessions weakened prices

"A delayed December new-home sales release showed a slight increase in 2025 over a year earlier, but median new-home sales prices decreased, reflecting a challenging homebuilding market weighed down by cost reductions, elevated incentives and a slower-than-expected sales pace. New home sales ended 2025 on a mixed but resilient note, signaling steady underlying demand despite ongoing affordability and supply constraints, wrote Danushka Nanayakkara-Skillington, Assistant VP for Forecasting and Analysis at the National Association of Home Builders."

"The South is the nation's fastest-growing region, but homebuilders across the Sun Belt are working through an oversupply of new houses after ramping up speculative construction in the years following the COVID pandemic. To sell that excess inventory, builders nationwide, but particularly in the South and West, became increasingly aggressive, offering price cuts and incentives to move spec homes that depreciate in value the longer they sit unsold."

"According to the U.S. Census Bureau's New Residential Sales report released on Friday, new home sales were at a seasonally-adjusted annual rate of 745,000 in December, a decline of 1.7% month-over-month from November, but a 3.8% year-over-year increase. However, the median sales price of new homes sold in December declined 2.0% year over year, from $423,000 to $414,000. Sales volume grew 30% in the Midwest, and inched up more modestly in the Northeast (12.1%) and the West (1.8%)."

A delayed government release shows December 2025 new-home sales at a seasonally-adjusted annual rate of 745,000, down 1.7% month-over-month but up 3.8% year-over-year. The median sales price of new homes fell 2.0% year-over-year, from $423,000 to $414,000. Sales volume surged 30% in the Midwest, rose 12.1% in the Northeast and 1.8% in the West, while the South declined 1.2% yet still accounted for nearly 60% of new-home sales. Homebuilders, especially across the Sun Belt, face oversupply after speculative construction and are using price reductions and incentives to move inventory amid affordability constraints.

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