In the South, inventory for sale was up 71% from 2019, while sales were down 8%. Homebuilders are very motivated to make deals.

By Wolf Richter for WOLF STREET.

The median price of new single-family homes sold by homebuilders in June dropped by 2.7% year-over-year and by 3.8% from two years ago, and by 13.5% from the peak in October 2022, to $398,300 (blue in the chart), according to data from the Census Bureau today.

But this median price reflects prices in sales contracts and does not include the incentives and the substantial costs of mortgage-rate buydowns that homebuilders use to increase their sales. Homebuilders include the costs of incentives and mortgage-rate buydowns in their average selling prices that they report in their financial statements. But they’re not reflected here in the data from the Census Bureau.

The three-month average median price, which irons out some of the month-to-month squiggles, fell by 1.7% year-over-year and by 6.7% from two years ago, to $408,800, where it had first been in October 2021 (red).

Homebuilders are in the business of building and selling homes, no matter what mortgage rates do, and no matter how tough the market may be. They strive to protect or gain market share, and in this market, they have reduced prices, piled on incentives, and bought down mortgage rates to boost their sales, or to keep them from plunging, and it has reduced their gross margins, net profits, and share prices.

Since mid-September 2024, the stocks of the biggest homebuilders have dropped in a range between -23% (D.R. Horton) at one end, and -51% (Lennar) at the other end. Lennar has been aggressive in its pricing, giving up a big portion of its gross margin but gaining substantial market share. Pulte Group is the exception; its stock is down only about 3% since mid-September 2024. Taylor Morrison has been acquired by Berkshire Hathaway this year.

Sales of new single-family homes at all stages of construction fell by 5.3% year-over-year in June, to 54,000 homes, the third month in a row of year-over-year declines. Compared to June 2019, sales were down by 18%.

Of those total sales, 67% occurred in the South and 21% in the West (88% combined). The remaining 12% of the sales occurred in the Northeast and Midwest combined.

Inventory of single-family homes at all stages of construction rose to 491,000, the third month in a row of increases – tracking the three-month surge in mortgage rates, and the three-month decline in sales.

Regionally, 61% of this inventory is in the South (where 67% of the sales took place), 21% in the West (where 21% of the sales took place), and 18% of it is in the Midwest and Northeast (where 12% of the sales took place).

This is a very large inventory for sale, amounting to 9.3 months of supply at the current rate of sales. But new supply — new additions to the US housing stock — is precisely what the housing market needs the most, and homebuilders are building it. Now they just need more people to buy those homes.

Inventory of under-construction homes rose to 262,000 homes, the third month in a row of increases, but was still down 10% from a year ago.

This is what is in the construction pipeline but hasn’t been sold yet. Homebuilders are motivated to be aggressive in selling it.

Inventory of completed homes for sale has been getting whittled down from the very high levels in December, to 113,000 homes in June, unchanged from May, and that was still up 1% from a year ago, and up by 49% from 2019.

These are mostly move-in ready “spec homes” that builders have a lot of capital tied up in, and that they’re very motivated to sell.

Inventory & sales by region.

A map of the four Census regions is below the article at the top of the comments.

In the South, inventory of new single-family homes for sale at all stages of construction declined by 4% year-over-year to 300,000 in June, but was up by 71% from June 2019. This is huge gigantic amount of inventory that homebuilders have to sell.

Sales in the south were unchanged year-over-year, at 36,000 single-family homes, down by about 8% from 2019.

So inventory up by 71% from 2019, and sales down by 8% from 2019. This is the definition of a glut.

The chart shows the three-month average sales to iron out some of the month-to-month squiggles.

In the West, inventory of new single-family homes for sale declined by 6% from a year ago and by 4% from two years ago, to 104,000, but were still up by 22% from 2019.

Sales in the West plunged 25% year-over-year, by 36% from two years ago, and by 50% from 2019, to just 9,000 homes.

The chart shows the three-month average sales which irons out some of the month-to-month squiggles, including the squiggle-plunge in June.

In the Midwest, inventory jumped by 8% year-over-year, by 34% from two years ago, and by 49% from 2019, to 55,000 new homes, along with October and November 2025 a 16-year high:

Sales came in at 7,000 (the Census Bureau rounds to the nearest 1,000). The chart shows the three-month average.

In the Northeast, inventory rose 3% year-over-year, by 28% from two years ago, and by 14% from 2019, to 32,000 new single-family homes.

The Northeast is a small area with big densely populated cities where multifamily construction (condos and apartments) plays a big role, rather than single-family construction.

Sales came in at 2,000 (rounded to the nearest 1,000). The chart shows the three-month average.

In case you missed it: Home Prices in 33 Big Expensive Cities in America: 25 Fell Year-over-Year in June, 2 Rose to New Highs

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