American New Home Sales Lose Momentum

Sales of newly built homes in the United States declined in September as higher borrowing costs continued to restrict affordability, adding to evidence of weakness in the residential property market. Figures released by the Commerce Department on 27 October showed sales falling 0.6% to a seasonally adjusted annual rate of 676,000 units, reversing part of the previous month's recovery.

The decline was smaller than economists had anticipated, with Reuters analysts forecasting a rate of 650,000 sales. Nevertheless, transactions were 5.3% below September 2025 levels, reflecting the continued impact of expensive mortgages on household purchasing decisions. According to Freddie Mac, the average interest rate on a 30-year fixed mortgage reached 7.32% during the preceding week, having risen substantially since the escalation of the Middle East conflict earlier in the year.

The median price of a new home fell 3.9% from a year earlier to $400,400, suggesting that weaker demand is placing pressure on developers to adjust pricing. The number of completed and unfinished homes available for sale declined to 476,000, equivalent to approximately 8.4 months of supply at September's sales pace. Sales weakened in the South and Midwest but increased across the Northeast and West.

The figures present a difficult outlook for American housebuilders already facing higher financing costs and cautious consumers. Although lower property prices may help some buyers, elevated mortgage payments continue to undermine affordability. Weak demand and substantial unsold inventory could also discourage new construction, restricting future housing supply even as the market struggles to accommodate prospective homeowners.