New-home sales were surprisingly strong in June, surpassing Wall Street’s expectations, as builder incentives buttressed their appeal in a tough market. 

The seasonally adjusted annual rate of 628,000 homes topped the consensus estimate of 610,000, representing a 1.6% gain from May’s rate of 618,000 but a 5.6% drop from the June 2025 rate of 665,000, the U.S. Census Bureau and the Department of Housing and Urban Development reported. 

“New-home sales showed surprising resilience in June, even as mortgage rates climbed, because builders continue to do what the market needs most: create affordability,” First American Deputy Chief Economist Odeta Kushi said. “Through rate buydowns, incentives and smaller, lower-priced homes, builders are helping buyers stay in the game, despite challenging market conditions.” 

The changing landscape for new homes was reflected in the median sales price in June, Kushi said. It slid 3.3% from May and 2.7% from June 2025 to $398,300. 

“The challenging affordability environment is also influencing the types of homes that builders are bringing to market,” Kushi said, noting that the median-sales price fell to its lowest level since July 2025. “Some of that decline reflects builder price cuts, but the mix of homes sold is also playing an important role. …Builders are constructing and selling smaller, lower-priced homes that better align with what buyers can afford in today’s rate environment.” 

The supply of new homes for sale slipped 0.2% month over month and 3.2% year over year to 485,000, which represents a 9.3-month supply at the current sales rate.