US New Home Sales Plummet in April

The United States saw a 6.2% month-on-month decline in new single-family home sales in April, with the annualized rate falling to 622,000 units, nearly double the market expectation of a 3.2% decrease, indicating that the housing market remains mired in difficulties. The data for March was also significantly revised downward, plummeting from the previously announced increase of 7.4% to 3.4%. Looking at a longer timeframe, new home sales have been stuck in the past four years with limited signs of recovery.

Despite continuous efforts by builders to lower prices and offer various incentives, the response from homebuyers remains lukewarm. The core obstacle lies in the continuous rise in mortgage interest rates—since the outbreak of the Iran war, mortgage rates have cumulatively increased by more than half a percentage point, causing many middle- and low-income Americans to view the housing market as out of reach.

On the pricing front, the median price of new homes in April rose by 2.2% year-on-year to $422,500, with the average selling price at $508,800. The continuous increase in prices will further exacerbate affordability constraints. Concurrently, Case-Shiller data shows that half of the largest cities in the United States have experienced a decrease in prices for existing homes, with the housing market becoming increasingly polarized between hot and cold spots.

Regarding the supply side, the number of new homes for sale in the market in April decreased compared to the same period last year, falling to 489,000 units, which would take 9.4 months to deplete at the current sales pace. The drag on economic growth from housing construction has persisted throughout 2025 and the first quarter of this year, and with builders shifting their focus to digesting existing inventory, this suppressive effect is unlikely to change in the short term.