June New Home Sales Rise Modestly, Prices Fall Year-Over-Year

New single-family home sales in June saw a modest 1.6% increase from May, reaching a seasonally adjusted annual rate of 628,000 units. However, this figure represents a 5.6% decrease compared to June of the previous year, indicating a slowdown in the housing market. The median sales price of new homes sold in June 2026 was $398,300, marking the lowest level since July 2025. This price is down 3.3% from May's adjusted figure of $412,000 and 2.7% below the June 2025 median of $409,200.

Builders are actively employing price discounts and incentives to move inventory, a strategy necessitated by an affordability-constrained market characterized by persistently high mortgage rates. In response to these affordability challenges, home builders are increasingly focusing on constructing smaller and less expensive homes. The National Association of Home Builders (NAHB) reported that the average size of new single-family homes has been declining since 2015. In the third quarter of 2025, the median single-family home measured 2,176 square feet, a significant reduction from over 2,600 square feet a decade prior.

Odeta Kushi, Deputy Chief Economist at First American, suggested that while incentives and price cuts are primary drivers of the price decline, the shift towards smaller homes also contributes. Kushi noted that over half of June sales were priced below $400,000, an increase from 47% a year earlier, and nearly a quarter were below $300,000, compared to 16% in June 2025. This trend indicates builders are adapting to buyer affordability by constructing and selling homes that align with current economic realities. Robert Dietz, Senior VP and chief economist at NAHB, commented on the challenges associated with new homes priced below $300,000.