New Home Sales Decrease to 623,000 Annual Rate in May

Median New Home Price is Down 7% from the Peak due to Change in Mix

The Census Bureau reports New Home Sales in May were at a seasonally adjusted annual rate (SAAR) of 623 thousand. The previous three months were revised down.

Sales of new single-family houses in May 2025 were at a seasonally-adjusted annual rate of 623,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 13.7 percent below the April 2025 rate of 722,000, and is 6.3 percent below the May 2024 rate of 665,000.
emphasis added

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

New home sales were below pre-pandemic levels. The second graph shows New Home Months of Supply.

The months of supply increased in May to 9.8 months from 8.3 months in April. The all-time record high was 12.2 months of supply in January 2009. The all-time record low was 3.3 months in August 2020. This is well above the top of the normal range (about 4 to 6 months of supply is normal).

The seasonally-adjusted estimate of new houses for sale at the end of May 2025 was 507,000. This is 1.4 percent above the April 2025 estimate of 500,000, and is 8.1 percent above the May 2024 estimate of 469,000.

This represents a supply of 9.8 months at the current sales rate. The months' supply is 18.1 percent above the April 2025 estimate of 8.3 months, and is 15.3 percent above the May 2024 estimate of 8.5 months.

On inventory, according to the Census Bureau:

"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."

Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed. The third graph shows the three categories of inventory starting in 1973.

The inventory of completed homes for sale (red) - at 119 thousand - is almost quadruple the record low of 31 thousand in February 2022. This is the most since July 2009, and somewhat above the normal level of completed homes for sale.

The inventory of homes under construction (blue) at 271 thousand is very high but is about 15% below the cycle peak in July 2022. The inventory of homes not started is at 117 thousand - this is the all-time high.

The fourth graph shows new home sales for each month, Not Seasonally Adjusted (NSA), for a few selected periods. Black is the maximum sales per month during the bubble (2005) and light gray is the minimum sales during the bust (2008 - 2011). The most recent six years are shown (2019 through 2025).

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