New-Home Sales Tumble in May as Mortgage Rates Remain High

New-home sales experienced a significant decline in May, with contract signings for newly built homes falling to a seasonally adjusted annual rate of 580,000. This represents a 7.3% decrease from April and a 6.8% drop compared to May of the previous year, according to a joint report from the U.S. Census Bureau and the Department of Housing and Urban Development released on Wednesday. The downturn is attributed to persistently high mortgage rates, which remained in the mid-6% range, and a subsequent increase in new home prices. The median sales price for new homes in May reached $424,900, a 2% rise from April's $416,500 and nearly unchanged from the prior year. This data follows a recent Census Bureau report indicating a decrease in single-family home construction starts, new permits, and completions during May. In contrast, the National Association of Realtors® reported an increase in existing home sales in May, reaching their highest point since December 2025, largely fueled by first-time homebuyers. Pending home sales also saw a positive trend, increasing by 3.8% month-over-month and 4.8% year-over-year.