New Home Sales Rebound in August as Builders Cut Prices

Sales of new single-family homes ran at a seasonally adjusted annual pace of 684,000 in August, up 6.4% from July, according to estimates released by the US Census Bureau and the Department of Housing and Urban Development. It was the strongest reading since December 2025. It was still 2% below the August 2025 pace of 698,000. The Census Bureau also revised July up to 643,000 from 607,000, which erases most of what first looked like a steep summer drop.

The resale side went the other way. The National Association of Realtors reported that existing-home sales fell 2% in August to a 3.98 million annual pace. The gap between the two markets is now mostly about price. New homes have cost less than existing homes for six straight months, and Sam Williamson, senior economist at First American, put the difference at $35,400.

Builders got there by chasing the buyer's budget. The median new-home price was $393,700 in August, up 0.4% from July and down 5.8% from a year earlier. The average price fell 9.1% in one month to $478,700. According to Williamson, 52% of August sales were priced under $400,000, up from 46% a year earlier, and 74% came in under $500,000, up from 65%. "Some of that change reflects builder discounts, but product mix is also playing an important role as builders construct and sell smaller homes," he said.

The discounts are wide. The National Association of Home Builders reported builder confidence at its lowest point in a year in September. 38% of builders cut prices and 66% offered incentives. "Price cuts, incentives and a shift toward smaller, more affordable homes are helping builders get deals across the finish line," Williamson said.

All of this happened while financing got more expensive. The 30-year fixed rate averaged 6.95% in the latest Freddie Mac survey, its highest level since January 2025. The Mortgage Bankers Association reported that applications for new-home mortgages fell to their 2026 low in August, so the sales that did close leaned heavily on builder concessions.

The recovery was not even across the country. Sales jumped 84.9% in the Midwest and rose 6.9% in the South. They fell 36.1% in the Northeast and 15.2% in the West. Inventory held at 483,000 new homes, and months of supply eased to 8.5 from 9.0. That is still well above the four to six months usually seen as a balanced market, which means builders still have plenty of homes to move.

For agents, the practical point is simple. A buyer who has been priced out of resale may now find a newer, smaller home for less money, with the builder paying for a rate buydown or closing costs. It is worth asking every local builder what incentives are on the table this month, and bringing that list to the next buyer consultation. The figures were first reported by Mortgage Professional America.