Sales of new single-family houses in July 2025 were at a seasonally-adjusted annual rate of 652,000, which is 0.6 percent below June and 8.2 percent below July 2024. Revisions raised last month's estimate, creating a slight month-to-month decline despite sales beating estimates near 630,000. New home sales have operated within a tight ten-year range excluding COVID extremes. Mortgage rates around 7% make selling difficult for both large and small builders; larger builders sustain margins while smaller builders struggle. Mortgage rates approaching 6% would likely boost smaller-builder confidence, single-family permits, and housing starts.
New home sales followed the existing home sales market by beating sales estimates and having positive revisions in today's report, which suggests that we are already seeing some benefits of lower mortgage rates. While it's not a spectacular number by any means, if mortgage rates can get toward 6% and just stay there for some time, the builders can get more confident about single-family permits again and then maybe housing starts can grow.
Sales of new single-family houses in July 2025 were at a seasonally-adjusted annual rate of 652,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.6 percent (15.5 percent)* below the June 2025 rate of 656,000, and is 8.2 percent (14.0 percent)* below the July 2024 rate of 710,000. Due to the revision of last month's data, which was adjusted upward, this report shows a slight month-to-month decline in new home sales.
It's challenging for both large and small builders to sell homes with mortgage rates hovering at 7% or higher. Larger builders have managed to maintain their profit margins to sustain sales, but smaller builders face greater difficulties in this environment. On the other hand, as mortgage rates approach 6%, even smaller builders feel more optimistic, as historically, their confidence has improved with lower rates.
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