The new home market was stagnant in June, with a slight dip in year-over-year sales and falling prices despite widespread builder incentives, according to Zonda’s latest New Home Market Update.
For the sixth consecutive month, the national market held at an “average” level of performance. While sales saw a minor increase from the previous month, the overall environment remains challenging for builders.
Why It Matters: The market is in a holding pattern. While heavy incentives are preventing a steeper sales decline, a significant rise in inventory is putting pressure on builders. The number of quick move-in (QMI) homes is up 18.5% from a year ago, contributing to price weakness. Some regions, like the Midwest and Northeast, are performing better than high-growth Sunbelt markets, where new and existing home supply has risen more sharply.
“The housing market creates jobs during the construction of a new home, at the point of sale, and following move-in,” said Ali Wolf, chief economist for Zonda. “The longer this stagnant sales environment persists, the wider the potential economic impact, particularly due to an accompanying lower pace of housing starts.”
By the Numbers:
- New-home sales reached a seasonally adjusted annualized rate of 689,834 in June, a 1.5% increase from May but down 2.2% from June 2024.
- National home prices for entry-level homes fell 1.7% year over year to $326,964, while move-up homes decreased 1.0% to $518,725.
- In June, 39% of builders reported lowering base prices, while 59% held prices flat.
- Incentives were offered on 75% of quick move-in homes and 57% of to-be-built homes.
Beyond the National Numbers
The top-line national data suggests a market holding steady, but performance at the local level tells a different story, with significant variations from market to market.
According to Zonda’s New Home Pending Sales Index, which adjusts for supply, some markets posted strong year-over-year growth, including Minneapolis (+17.1%), Jacksonville (+15.5%), and Cincinnati (+14.0%).
At the same time, several Western markets saw the largest declines, with sales dropping in San Francisco (-29.6%), Las Vegas (-21.3%), and Riverside/San Bernardino (-16.8%). This divergence in performance highlights how much a builder’s reality on the ground depends heavily on their specific region.
