Home Sales Drop

New home sales dropped in April, falling 6.2% from March and 11.3% from a year ago, coming in lower than economists expected, according to Homes.com. The main reasons were higher mortgage rates, economic uncertainty, and buyer hesitation caused by global instability and rising costs.

Even though spring is usually the strongest buying season, momentum slowed after a stronger February and March. Builder confidence improved slightly in May, but overall sentiment remains weak.

A few key points:

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  New home sales in April: 622,000 annualized pace

• Expected sales: 663,000

• Inventory increased: 9.4 months of supply, up from 8.7 months in March

• Median new home price: $422,500

• Price increase: up 8% from March and 2.2% from last year

• The price jump does not necessarily mean all home prices are rising quickly. It mostly reflects that a larger share of homes sold were priced above $400,000.

The Midwest is doing better than other regions because affordability is stronger there. However, the National Association of Home Builders warned that new home sales could decline overall in 2026 if economic uncertainty and high rates continue.

The big takeaway: buyers are still interested, but affordability pressure is making them cautious. Builders may need to offer incentives, better pricing, or rate buydowns to keep sales moving.