New home sales flatlined in July while quick move-in inventory climbed to levels not seen since the 2022 market correction, forcing builders to lean heavily on incentives to move product, according to Zonda’s July 2025 New Home Market Update.
Quick move-in homes averaged 2.5 per community in July, matching 2022’s elevated levels when rising mortgage rates first pushed buyers to the sidelines. Builders responded by offering incentives on 77% of QMI inventory and 58% of to-be-built homes, using price cuts and buydowns to keep homes moving.
Why It Matters: The inventory buildup has builders caught between maintaining production pace and weakening buyer demand. With QMI homes up 18.5% year-over-year to 39,225 units nationally, builders face mounting carrying costs and pressure to move spec inventory before starting new homes.
“The key characteristic of today’s market is that blanket statements simply don’t work,” said Ali Wolf, chief economist for Zonda and NewHomeSource. “Saying ‘Texas is bad,’ for example, bundles a slow market like Austin with a more stable one like Dallas.”
The pricing picture shows diverging trends by buyer segment. Move-up homes saw their first price increase since January, rising 0.4% to $518,194, while high-end homes jumped 2.6% to $923,048. Entry-level homes continued sliding, down 1.1% to $325,690, reflecting builders’ push to maintain affordability for first-time buyers facing elevated mortgage rates.
Regional Variations:
- Seattle QMI inventory surged 146.9% year-over-year
- Orlando led community count growth at 16.8%
- Philadelphia saw communities drop 16.3%
The number of actively selling communities rose 9.8% to 16,596 nationally, suggesting builders continue bringing new projects online despite sales headwinds. That expansion, combined with rising spec inventory, points to a market where production momentum hasn’t yet adjusted to cooler demand.
July’s seasonally adjusted annual sales rate of 668,318 units marked a 6% decline from last year.
