• There were 511,000 new home sales nationwide in July (SAAR), down 12.6% from June and down 29.6% from July 2021, according to the U.S. Census Bureau.

• The median sales price of new houses sold in July was $439,400.

• The seasonally-adjusted estimate of new houses for sale at the end of July was 464,000, a supply of 10.9 months at the current sales rate.

As the tides of rising housing costs sweep buyers off the shore of the for-sale market, new home sales have been rapidly descending from the pandemic induced peak to the lowest level since 2015. Home builders have also pulled back activity after months of sustained hits to builder sentiment, reducing the number of new homes in the pipeline to be sold. As affordability remains a challenge for buyers, builders could continue to see the demand pool for completed new homes drying up, so a low flow of both new inventory and sales could continue into the months ahead. Builders are also struggling to find qualified buyers at an agreeable price, as many builders report an uptick in price cuts and incentives in an effort to meet buyers where they are, but that isn't enough to boost new home sales as the July data was far below consensus. The housing market is in the midst of a much needed rebalancing as prices are leveling off, transitioning power back into the hands of buyers who can afford to stick around. But the market is still a long way off from finding a sweet spot, and discouraging new construction data shows how far there is left to go to reach a true equilibrium.

The post July New Home Sales: The New Construction Cool Down Continues appeared first on Zillow Research.