Sales of new U.S. homes rebounded in August, helped by a stronger showing from builders, but the increase did little to change a housing market still constrained by high borrowing costs and affordability pressures.
Sales of newly built single-family homes rose 6.4% from July to a seasonally adjusted annual rate of 684,000, according to data released by the U.S. Census Bureau and Department of Housing and Urban Development. July sales were revised upward to an annualized 643,000.
Despite the monthly increase, August sales were 2% below the same month a year earlier, underscoring the difficulty the new-home market has had sustaining momentum in 2026.
“The gain in new home sales is encouraging, but affordability remains a challenge,” said Bill Owens, chairman of the National Association of Home Builders (NAHB). “Sales are still down year over year and year to date, and builders continue to use incentives and pricing adjustments to support buyers as limited existing-home inventory helps sustain the new-home market.”
“While the monthly increase in sales is a positive development, housing demand remains sensitive to higher mortgage rates and broader macroeconomic conditions,” said Danushka Nanayakkara-Skillington, NAHB assistant vice president for forecasting and analysis. “A sustained improvement in affordability, particularly through lower financing costs, would provide a stronger foundation for housing demand going forward.”
Mortgage costs remain a significant hurdle for prospective buyers. The average 30-year fixed mortgage rate was 6.66% in the final week of August and had climbed to 7.03% by Sept. 24, according to Freddie Mac.
Builders have increasingly relied on price reductions and other incentives to attract buyers as financing costs weigh on purchasing power. The NAHB has said affordability and elevated mortgage rates continue to restrain demand.
The August data also showed that builders are carrying a substantial amount of unsold inventory. The number of new homes for sale was 483,000, essentially unchanged from July but 2% below a year earlier. At August’s sales rate, that amounted to an 8.5-month supply.
Of those homes, 112,000 were completed and ready for occupancy. When new and existing homes are considered together, the available supply was equivalent to about 5.3 months of sales, according to NAHB.
Prices, meanwhile, continued to show signs of easing. The median price of a newly built home increased 0.4% from July to $393,700, but remained 5.8% below August 2025. The average sales price fell 8.8% from a year earlier to $478,700.
The lower median price suggests builders have been competing more aggressively for buyers, although monthly price figures can also be affected by changes in the mix of homes sold.
The regional picture remains uneven. Through August, new-home sales were down 0.6% in the Midwest, 1.0% in the South and 10.0% in the West, while sales in the Northeast were unchanged from the comparable period a year earlier.
The August rebound followed a sharp decline in July, when new-home sales dropped 10.5% to an annualized 607,000 before the latest revision. The volatility illustrates how sensitive the market remains to financing costs and buyer affordability.
The Census Bureau defines a new-home sale as occurring when a sales contract is signed or a deposit is accepted. The home can be at any stage of construction, including before construction begins, so the monthly sales figures do not represent completed transactions.
For builders, the combination of lower prices, substantial inventory and mortgage rates around 7% presents a mixed backdrop. New-home construction can benefit from the limited supply of existing homes in some markets, but buyers remain constrained by the cost of financing and the overall expense of homeownership.
The latest figures therefore point to a housing market that is showing periodic bursts of demand rather than a broad-based recovery. A sustained improvement would likely require either lower mortgage rates, stronger household purchasing power, further price adjustments or some combination of the three.