New Home Sales Slip Slightly in September

What happened this month

New home sales retreated a bit from August’s performance (down 0.6% month over month) and came in behind last year’s level (down 5.3% year over year). Sales activity in the new home segment has been muted so far through 2026, running 2.9% below 2025 year to date. Buyers are reluctant in this environment of elevated mortgage rates, and builders are having to offer lower prices and buyer incentives to entice them. The median sale price in September for new homes was $400,400, 3.9% lower than in September of 2025 and once again lower than the median existing home sale price from the same month.

The Northeast rebounded in new home sales after a weak August, coming in at 28.0% higher than last month and 10.3% higher than last year. The other regions all posted year-over-year losses. The West had its best month since April, including a 21.4% month-over-month improvement, but still fell 17.4% short on a year over year basis. New home sales in the Midwest fell 7.3% month over month and 8.2% year over year, while in the South they dropped 6.6% from August and 0.7% from last September. Data from the Northeast, by far the smallest region for both new construction and new home sales activity, is quite noisy, so the improvement there should be considered with some caution. Overall, the regional splits point to a new home sales slowdown that is geographically widespread.

Inventory growth has slowed

The number of new homes for sale fell 1.0% month over month and 2.3% year over year to 476,000, its lowest reading since September 2024. Builders are pulling back on single-family home completions, so even though fewer new homes are being sold, the number of new homes on the market is contracting. This is reflected in the months of supply figure, which fell to 8.4 this month from 8.5 last month and closer to 9 for much of 2026 so far. Builders are wary of constructing homes they will not be able to sell quickly, which is further evidenced by the stage of construction of the new homes on the market. The number of new homes for sale that have not yet been started, 115,000 of them, is the highest in data history. Meanwhile, the number of new homes under construction or completed is falling.

What does this mean for buyers and builders?

The new home market is still firmly in buyers’ market territory. Builders, much like existing home sellers, are being forced to compete for the attention of a dwindling pool of buyers. Unlike existing home sellers, though, builders can’t afford to keep their inventory off the market until conditions improve. They can and are slowing down on the delivery of new homes, but there are still 111,000 completed homes for sale across the country for which builders are eagerly searching for buyers. Home shoppers should consider new construction not only because of the competitive prices and incentives offered by builders, but also because of the lower total cost of ownership that newly-built homes offer over the long run.