A modest drop in mortgage rates led to a surprisingly large jump in new home sales in August, though the figure may be revised downward in the coming month.
Sales of newly built single-family homes jumped 20.5% in August to a seasonally adjusted annual rate of 800,000 from an upwardly revised reading in July, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is up 15.4% from a year earlier.
The three-month moving average of new home sales was 713,000, an increase from 656,000 in July.
However, the Census Bureau’s estimate of new home sales is often volatile from month to month and is subject to significant revisions. Despite the sharp monthly increase in estimated August sales, NAHB expects a gradual improvement in new home sales, supported by a recent interest rate cut and a downturn trend in mortgage rates. Accordingly, it is possible the August Census reading will be revised lower in next month’s reporting.
A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the August reading of 800,000 units is the number of homes that would sell if this pace continued for the next 12 months.
New single-family home inventory declined for the third straight month to 490,000 residences marketed for sale (of all stages of construction) as of August. This is 1.4% lower than the previous month and 4.0% higher than a year earlier. At the current sales pace, the months’ supply for new homes was 7.4 compared to 8.2 a year ago. The decline in inventory reflects a recent slowing of home-building activity.
A year ago, there were 104,000 completed, ready-to-occupy homes available for sale (not seasonally adjusted). By the end of August 2025, that number increased 18.3% to 123,000. However, completed, ready-to-occupy inventory remains just 25% of total inventory, while homes under construction account for 53%. The remaining 21% of new homes for sale in August were homes that had not started construction when the sales contract was signed.
The median sale price of new homes rose to $413,500 in August, a 1.9% increase from a year ago. In August, 20% of new homes were priced below $300,000, while 31% were priced above $500,000. Notably, the share of new homes priced below $300,000 reached its highest level in the past 11 months.
Regionally, on a year-to-date basis, new home sales are down 22.0% in the Northeast, 3.9% in the Midwest, and 7.3% in the West. New home sales are up 3.3% in the South.