The US housing market has taken a sharp turn downward, with new home sales plummeting 13.7% in May according to the US Census Bureau. The South led the decline, seeing a 21% drop, while the Northeast saw an increase.
Experts warn that this trend is concerning, as it suggests that buyers are hesitant to enter the market due to high mortgage rates and economic uncertainty. Mortgage rates averaged 6.82% in May, making buying a new home unaffordable for many.
Existing home sales also dropped 0.7% compared to last year, with the median new home price rising to $426,600. The slowdown is raising alarm bells among experts, who predict that this could be one of the worst years for the housing market in decades.
The situation is further complicated by a record $700 billion worth of homes for sale across the country, according to Redfin. Despite an increase in new home construction, supply has not kept pace with demand, leaving buyers waiting on the sidelines.
Source: https://www.businessinsider.com/new-home-sales-inventory-prices-mortgage-rates-economy-redfin-2025-6