Sales of newly built homes dropped 8.7 percent in August to a seasonally adjusted annual rate of 675,000.

No one can predict the future of real estate, but you can prepare. Find out what to prepare for and pick up the tools you’ll need at Virtual Inman Connect on Nov. 1-2, 2023. And don’t miss Inman Connect New York on Jan. 23-25, 2024, where AI, capital and more will be center stage. Bet big on the future and join us at Connect.

Sales of newly built homes were pushed to their lowest point since March by elevated mortgage rates and poor affordability conditions, new data shows.

New-home sales plummeted 8.7 percent in August to a seasonally adjusted annual rate of 675,000. Despite the steep decrease, sales remained up 5.8 percent from a year ago, according to the United States Census Bureau.

Newly built homes have emerged as a popular alternative for homebuyers with means as existing home inventory remains scarce amid high mortgage rates, but the sector is not immune to the affordability woes facing the housing market, with mortgage rates now north of 7 percent and homebuilders struggling with supply chain issues.

“Sales weakened in August with average mortgage rates above 7 percent,” said National Association of Home Builders Chief Economist Robert Dietz. “While some builders were able to offset that effect via mortgage rate buydowns, rates moved higher this month, suggesting the pace of new home sales will weaken further for September.”

The median sale price for newly built homes was $430,000 — down 2 percent from a year ago — while the average price was $514,000, according to the Census Bureau. The seasonally adjusted estimate of new homes for sale at the end of August was 436,000, representing a supply of 7.8 months at the current sales rate — down 5.2 percent compared to a year ago.

Of the total inventory of homes for sale, including both new and existing, newly built homes represented 31 percent of those homes for sale in August, and represented 16 percent of total home sales during the month.

“Builders are being more cautious about managing their inventory in this rising rate environment,” Dietz noted. “A year ago, 10 percent of the new home inventory listed for sale consisted of homes that had not yet started construction, and that share has now risen to 17 percent of the total inventory.”

Regionally, new-home sales were up 4.8 percent in the Northeast, 4.4 percent in the Midwest and 1.9 percent in the South. Sales were down 0.5 percent in the West.

Email Ben Verde

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription