Housing sales, new and existing, have been comatose for over 3 years.
New Residential Construction Report
The New Residential Construction Report for July 2026 remains a broken record.
New Home Sales
- Sales of new single-family houses in July 2026 were at a seasonally-adjusted annual rate of 607,000.
- This is 10.5 percent (±14.0 percent) below the June 2026 rate of 678,000, and is 6.3 percent (±19.6 percent) below the July 2025 rate of 648,000.
For Sale Inventory and Months’ Supply
- The seasonally-adjusted estimate of new houses for sale at the end of July 2026 was 488,000. This is 1.9 percent (±1.2 percent) above the June 2026 estimate of 479,000, and is 1.6 percent (±4.0 percent) below the July 2025 estimate of 496,000.
- This represents a supply of 9.6 months at the current sales rate. The months’ supply is 12.9 percent (±21.3 percent) above the June 2026 estimate of 8.5 months, and is 4.3 percent (±25.2 percent) above the July 2025 estimate of 9.2 months.
Sales Price
- The median sales price of new houses sold in July 2026 was $393,800. This is 2.3 percent (±7.4 percent) below the June 2026 price of $403,100, and is 0.9 percent (±6.9 percent) below the July 2025 price of $397,300.
- The average sales price of new houses sold in July 2026 was $508,800. This is 4.1 percent (±11.8 percent) above the June 2026 price of $488,900, and is 5.4 percent (±13.1 percent) above the July 2025 price of $482,800.
Note the huge margins of error on these stats, ±14.0 PP on monthly sales and ±19.6 PP on year-over-year sales.
New Home Sales Annualized vs Homes for Sale Detail
Supply of new homes for sale has generally been rising. Actual sales hvae generally been falling.
However, both measures appear to have stabilized.
New Homes For Sale by Stage of Construction
Stage of Construction Details
- For Sale: 488,000
- Not Started: 115,000
- Under Construction: 256,000
- Completed: 117,000
- Under Construction Plus Completed: 373,000
Counting vacant lots as a home for sale strikes me as silly. But the Census Department includes not started homes in its measures of supply.
The important numbers are completed and started plus completed. Those homes represent builder commitments and carrying costs.
To sell these homes, builders are under pressure to lower prices, offer financing, or other incentives.
New Homes for Sale Supply in Months
Supply in Months Detail
- All Supply: 9.6 Months
- Under Construction or Finished: 7.4 percent
- Finished: 2.3 percent
All of these numbers are elevated.
New Home Sales vs Existing Home Sales
One Word – Comatose or Stagnant
New and existing homes have both been stagnant since January 2023.
This is despite significant interest rate moves in both directions.
30-Year Mortgage Rates
Rates courtesy of Mortgage News Daily.
Pool of Price Insensitive Buyers
Taken together, the preceding two charts tell a story of price insensitive buyers.
This pool includes all cash buyers, those with huge stock market gains who are unconstrained by affordability measures, those with significant home equity who want to trade down, and speculators who believe the stock market or the Fed will bail them out.
Everyone else has been priced out of the market by a price-mortgage rate combination that is just too high.
Few existing-home owners want to trade a 3 percent mortgage rate for one again approaching 7 percent.
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August 21, 2026: Pending Home Sales Decline 2.3 Percent, Housing Market Remains Stuck
August 21, 2026: Trump Threatens to Use the Military on the US Bond Market. What!?
Trump responds to a reporter’s question with an answer that makes no sense.
Mortgage rates are too high! Markets are dumb, we are smart! We’ll buy long term Treasuries and hope for the best! — Bessent
Fed will keep unloading MBS’s, too bad, so there! — Warsh
Mish shows the mortgage rate trend…
Gee, guess who’s winning this pissing match?
I think there is a lot of wiggle room in the “under construction” vs “completed” categories. The only thing preventing a house from moving to the “completed” category might be connecting the power or water. This massively sets up the reported numbers for manipulation.
Another prime example of the result of taconomics. We haven’t seen anything yet.
I live in a fairly affluent suburb of Orlando. It has always been a desirable location and homes sell rather quickly. A trend I started noticing last year was that older ranch homes from the 1950s and 1960s were being bought up, demolished, and then a 2-story 3500sq ft mansion goes up. It used to be that private individuals would buy the old house and then have a custom homebuilder put up a new house to the owner’s specifications. Lately, this has changed to developers buying, demolishing, and putting up a new, big mansion. Then a FOR SALE sign is slapped on the front yard and the asking prices are $2.5M+. These homes are not selling.
There are boatloads of new developments going up in outlying areas of Orlando…former pasture lands. All cookie-cutter homes. The word is that the builders are having to offer deep discounts and/or multiple upgrades to move existing, unsold inventory. I guess lots of people are still interested in moving here, but taxes, insurance, and mortgage rates are taking their toll. The outlying areas also have unbelievable congestion as road building cannot keep pace with the new housing developments. Glad I am retired and don’t have to drive too much.
As always, in response. Prices rose way too fast during the Covid housing boom (summer of 2020 through spring/summer of 2022) to the tune of 50 percent or about 8 years of price appreciation under a normal market. This, of course, due to the outrageously low mortgage rates available at the time.
Once rates climbed to 5.5 percent, the party stopped. Then, for 3 years, the party just stopped, as those who bought with those low rates, or who refinanced down from their previous purchase (meaning almost everyone!) were unwilling to part with the asset that the obtained with such fantastic financing.
Beginning last summer (2025) and continuing now, the “unlock” has finally started, with certain sellers going ahead and pulling the trigger. Why? Various reasons. For some, as you state above, they have the cash and the new, higher rate doesn’t affect them. Some have this cash from earnings and the stock market, and others have this cash from the sale of their (paid off) previous home that increased 50 percent in value in only 2 years, and are downsizing. But, others, especially on the lower end, are selling because they don’t have the money to continue owning (outrageous insurance costs, property tax on the new, inflated value, general inflation (gas, groceries, everything else). The last group is selling and moving into apartments or similar. And lastly, the sellers are those that just have life changes, death, divorce, transfer, etc.
But, new listings are up, substantially, from the previous two years. The only problem is, they are not selling, because buyers do not want them at the price they are being offered for! So, they sit, until the seller either lowers the price, or decides to take them off the market and not move after all.
The small window of two years with incredibly low mortgage rates will continue to influence things going forward, but, the dam is starting to break due simply to the facts of life. Sometimes, people just have to move. Prices will remain stagnant or even decline moving forward and slowly but surely, every year, there will be less and less people that have homes with 3 percent mortgages.
As far as I’m concerned, this is the price that has to be paid, and it will take some time, but, the selling has begun, and prices have moderated if not fallen, in many areas.
That short period (mid 2020 to early 2022) of below 3.5% rate for the 30 Yr mortgage accounted for most of the COVID gains. Whereas I think it took from around 2002 to 2007 to create the Great Recession’s housing bubble.
Housing went up about 45% during COVID.
I am market researching one townhome community in Panama City Beach, where new 3 bedrm, 2.5 bath, 2 car garage townhomes sold for $185,000 in 2016 and $230,000 in March 2020.
They now sell between $230,000 and $250,000. Seems like the COVID gains have been erased.
Same 3bedroom townhome unit could have easily sold for $325,000 in late 2021.
A same size unit in that townhome community was built in 2007 and immediately sold for $270,000, then it got foreclosed and sold for around $130,000 in 2011.
“…one funeral at a time.” – Max Planck
Yep, for existing home sales there are two main facgtors. First is is interest rates. Although not high by long term hitorical comparisons, they are high relative to a decade ago, and locking people in place. Second though, and just as important, is demographics, i.e. “funerals”, which is slowly and inexorably working its way through the system. Lots and lots of boomers are simply staying in place in much larger houses than they need. That will change as they age, but it is going to be a slow process. Existing home sales are going to be stagnant for years to come.
New Home Sales is somewhat different of course since there isn’t an owner sitting in place. It would be intersting to see a chart like the lead one, which goes back 6 decades, normalized for some popluation metric (e.g. total number of households, or even better something like new household formation in the 20-40 year old population).
If you look at Wolfs site he does a nice breakdown by major metro area to give an idea of places that are still in a bubble vs those that are unlikely to fall much further
https://wolfstreet.com/2026/08/17/prices-of-mid-tier-homes-in-33-big-expensive-cities-in-america-july-2026-update/
The key thing for each Metro is to look at the since 2000 percentage increase. It’s been 27 years since 2000 (year 0 vs 1 start) and if we assume a 3% inflation rate you get 1.03^27 = 2.22 or 122%.
Markets that are close to 122% are in line with inflation since 2000. So a place like Austin at 157% is very close to fair value and unlikely to fall a whole lot further. A place like Oakland at 280% is not and has potential to fall by a fair bit more.
Yeah but the problem is that houses aren’t sustainable because of rising insurance, property taxes, maintenance and other fees (HOAs), at least in the present “system” as it has been known.
insurance and taxes are now more than mortgage payments in most places across the country and they will only continue to get worse if there is no room to fall further.
In a nutshell, what worked the past 30 to 100 years won’t work anymore because the currency has been debased so much. The whole monetary system is out of whack and the fix is usually major crashes and great depressions.
From 1929 to 2029 sounds about right but I’m banking on 2032.
You aren’t wrong about taxes and insurance costs. Things seem to have at least stabilized in Florida on both over the last 2 years. My Home insurance went up less than 2% this year and my taxes were around +5% last year (waiting on this years numbers but with prices flat it means valuations won’t have moved so I’m not expecting anything more than inflations 3%)
Just saying that price wise many places are in line now and won’t be dropping a whole lot more.