US new-home sales declined by more than forecast in April

[NEW YORK] Sales of new US homes declined in April by more than forecast, as builder incentives failed to motivate potential buyers at the start of the spring selling season.

Purchases of new single-family homes decreased 6.2 per cent from March to a 622,000 annualised pace, government data released on Thursday (May 28) showed.

Economists expected a 660,000 rate, based on the median estimate in a Bloomberg survey.

The sales setback in April suggests the nation is still struggling to emerge from a three-year housing funk.

Despite builder efforts to construct lower-priced homes and offer various incentives, mortgage rates are rising and many lower-income Americans still view the housing market as unaffordable.

Housing construction, which has subtracted from economic growth through all of 2025 and into the first quarter this year, may stay constrained in the coming months as builders focus on reducing inventory.

The new-home sales report showed that the number of properties for sale in April eased from the year-ago period to 489,000. At the latest sales pace, the supply of new homes would last 9.4 months.

It also showed that the median sales price of a new single-family home increased 2.2 per cent in April from the year-ago period to US$422,500.

While fewer houses priced less than US$300,000 were sold, more contracts were signed on homes in the US$400,000 to US$500,000 range.

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A sustained rise in prices will exacerbate affordability constraints in the wake of a more than half of a percentage-point increase in mortgage rates since the start of the Iran war.

Sales dropped in three of four regions.

In the south, the US’s biggest home-selling region, contract signings decreased nearly 10 per cent in April.

Sales slumped 25 per cent in the US Midwest to the lowest level in more than a year. In the west, they jumped 18.7 per cent to the fastest pace since October.

Stuart Paul, a Bloomberg economist, said: “The downside surprise in sales volumes, paired with downward revisions to the March data, paint a bleak picture of housing-market activity.

“While the median monthly sales price has been volatile, we think bloated inventories – and rising mortgage rates – will keep prices under pressure throughout the year.”

New-home sales are seen as a more timely measurement than purchases of existing homes, which are calculated when contracts close. However, the data is volatile on a monthly basis.

The government report showed 90 per cent confidence that the change in new-home sales ranged from a 19 per cent decline to a 6.6 per cent gain. BLOOMBERG