Lower U.S. Prices Lift New Home Sales (Outlook Dims on High Rates)
New Home Sales Surge Amid Price Drops As the median prices of new single-family homes in the U.S. decline, the market is witnessing a notable shift. Falling to $416,900 in Q1 2025, this represents a 2.32% year-over-year reduction. The decrease in new home prices has led to significant sales increases. April 2025 saw a seasonally adjusted annual rate of 743,000 new home sales, marking a 10.9% increase from March. This trend shows how price adjustments are making new homes more attractive to buyers. Meanwhile, existing home prices followed a different path, rising to a median of $402,300 in Q1 2025. The narrowing price gap between new and existing homes now stands at $14,600. This reflects changes in buyer preferences and purchase power. Existing-home sales fell by 0.5% in April 2025 compared to the previous month. New home markets, however, benefitted from moderated prices amid high interest rates. High interest rates continue to apply pressure on home purchasers. Yet, decreased prices ...