• Sales of new single-family homes rose to an annualized rate of 714,000 in July, up 4.4% from June’s revised sales pace and 31.5% higher than in July 2022, according to the U.S. Census Bureau.
• The median sales price of new houses sold in July was $436,700, which was 4.8% higher than in June, and 8.7% lower than in July 2022.
• The seasonally-adjusted estimate of new houses for sale at the end of July was 437,000, or 7.3 months’ supply at the current sales rate.

What happened: New home sales climbed modestly from the previous month’s rate, and substantially from this time last year.

Why it matters: Higher new home sales reflect their relative availability compared to low inventory of previously owned homes, as well as successful efforts by builders to attract buyers with lower prices than last year and other concessions such as interest rate buy-downs.

What Zillow Senior Economist Jeff Tucker thinks: Builders have weathered the storm of higher mortgage interest rates by adapting to their customers’ needs – they are building smaller homes and offering incentives like interest rate buydowns to help seal the deal with buyers whose budgets are stretched thin by higher mortgage costs. Many potential home buyers likely feel frustrated by the incredible lack of fresh listings of existing homes this summer, inclining more of them to turn to new construction for the availability and selection they can’t find on the resale market. So long as high mortgage rates keep existing homeowners on the sidelines, home builders will find opportunity in this market.