New-home sales rose 2.1% in August as builders launched sales campaigns and cut prices to move rising inventory, according to Zonda’s latest New Home Market Update. Importantly, early September brought mortgage rates below 6.5%, a shift that could widen the buyer pool if it holds.
For the eighth consecutive month, the national market held at an “average” level of performance. While sales campaigns helped lift activity from the previous month, the overall market remains down compared with last year.
Why It Matters: Builders are successfully using incentives and price cuts to move a growing supply of homes. While sales saw a modest increase, September’s mortgage rate drop could reshape the affordability landscape for buyers.
“Moving from 7% to 6.5% puts 2.1 million more households in a position to buy,” said Ali Wolf, chief economist for Zonda and NewHomeSource. “While we don’t expect consumers to rush back to the market overnight due to lingering economic uncertainty, this is a clear step in the right direction.”
By the Numbers:
- New-home sales reached a seasonally adjusted annualized rate of 703,003 in August, a 2.1% increase from July but down 1.2% from August 2024.
- National home prices for entry-level homes fell 1.1% year over year to $324,813, while move-up prices rose 0.6% year over year to $517,561.
- In August, 42% of builders reported lowering base prices, while 55% held prices flat.
- Incentives were offered on 78% of quick move-in homes and 59% of to-be-built homes.
Quick Move-In Supply Surges
The build-up of available inventory has led to a larger pipeline of quick move-in (QMI) homes and more ready homes per community. The national QMI count reached 41,417, a jump of 25.3% from a year ago. On a per-community basis, QMIs rose to 2.5 homes, up 14.2% from last year and matching late-2022 levels.
The trend was even more pronounced in certain markets. Washington, D.C., saw its QMI inventory grow by 193.6% year over year, while Seattle’s increased by 155.6% and Baltimore’s by 137.5%. This growing supply of new, move-in-ready homes provides buyers with more near-term options and serves as an alternative to resale supply.
