Official data from the U.S. Census Bureau and Housing Department shows that sales of new homes in the United States fell by 13.7% in May 2025 compared to April.

Builders sold homes at an annual pace of 623,000 units, down from 722,000 the month before. This is also 6.3% less than in May last year, showing that fewer people are buying new homes.

At the same time, the price of new homes keeps rising. The median price for a new home in May was $426,600, which is 3.7% higher than in April and 3% more than a year ago.

The average price reached $522,200. These higher prices, along with the average mortgage rate staying close to 7%, have made it harder for many people to afford a new home.

Because fewer people are buying, the number of new homes for sale has grown to 507,000 units, the highest since before the pandemic. At the current sales pace, it would take almost 10 months to sell all these homes, up from about eight months earlier this year.

U.S. New Home Sales Drop as High Prices and Mortgage Rates Keep Buyers Away. (Photo Internet reproduction)

The trend is similar for existing homes. The National Association of Realtors says that while sales of existing homes rose slightly in May, they are still lower than last year. The number of unsold homes is also growing, and more sellers are cutting their prices to attract buyers.

This slowdown matters because housing affects many parts of the economy, from construction jobs to spending on furniture and appliances.

When fewer homes sell, it can slow down economic growth. For businesses, investors, and families, these numbers show a market where high costs and interest rates are making it much harder to buy a home.