New Home Sales Decline as Builders Grapple with Rising Inventory and Affordability Crisis

The American housing market is facing mounting pressure as new home sales declined 0.6 percent in July to an annualized pace of 652,000 units, according to a new report from Wells Fargo Economics. While the figure beat some expectations due to upward revisions to prior months, the year-over-year picture tells a more troubling story: sales have plummeted 8.2 percent compared to July 2023, signaling that persistent affordability challenges are keeping potential buyers away. The decline comes despite homebuilders’ increasingly aggressive tactics to attract buyers, including mortgage rate buydowns and outright price cuts. The median new home price dropped 5.9 percent year-over-year to $403,800 in July, down from $429,000 the previous year—a stark reversal that has eliminated the traditional pr