New home sales in July were reported at 607,000, below the estimate 620,000, representing a 10.5% monthly decrease. Compared to July 2025, sales were 6.3% lower. The monthly decline largely came from lower sales in the Midwest and South, while there was growth in the Northeast and West. The reading for the Midwest was the lowest since 2012. The for-sale inventory was 488,000, up 1.9% from the previous month. The median sales price fell 2.3% to $393,800.
The ABA Office of the Chief Economist believes that the July reading of new home sales reflects affordability challenges, with mortgage rates reaching 6.66% at the end of July, according to Freddie Mac. Despite home builders offering sales incentives during the typical home buying season, mortgage rates continue to be a hurdle for home buyers. Along with sluggish housing starts, this could lead to softer loan demand in residential construction lending; however home equity products continue to be a strong support for banks.
