New home sales declined in May as elevated mortgage rates, higher construction costs, and ongoing affordability challenges continued to sideline buyers.
Sales of newly built single-family homes fell 7.3% to a seasonally adjusted annual rate of 580,000, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Sales were down 6.8% compared to May 2025.
NAHB Chairman Bill Owens said high mortgage rates and limited purchasing power continue to shrink the pool of qualified buyers. While builders are offering incentives and price adjustments, NAHB Assistant Vice President Danushka Nanayakkara-Skillington noted that many households remain priced out of the market and that lower financing costs will be critical to improving affordability.
Builders had 496,000 new homes available for sale in May, representing a 10.3-month supply. The median sales price increased to $424,900, up 2.0% from April and essentially unchanged from a year earlier.
Regionally, year-to-date sales increased 1.9% in the Northeast and 4.2% in the Midwest but fell 8.2% in the South and 11.4% in the West.
