New-Home Sales Dip Less Than Expected as Builder Incentives Bolster Sales

Home sales dipped a bit less than expected last month, apparently as homebuilders used incentives to entice hesitant buyers.

Contract signings for new-construction properties reached a seasonally adjusted annual rate of 676,000 in September, the U.S. Census Bureau and Department of Housing and Urban Development reported Thursday. That's 0.6% below August's figure and down 5.3% from a year earlier, but more than the 653,000

The median sale price was $400,000, 3.9% above August 2026 where it hit $385,000, and 3.9% below September of last year, when it hit $416,800.

New-home sales in the Northeast rebounded 28% higher than last month and 10.3% higher than last year. But, all of the other regions of the country posted declines. The West had its best month since April but still fell 17.4% year-over-year. The Midwest is down 8.2% year-over-year, while the South is down 0.7% year-over-year.

For the first nine months of the year, overall new-home sales are 2.9% below where they were in 2025, Realtor.com® economist Joel Berner says.

"Buyers are reluctant in this environment of elevated mortgage rates, and builders are having to offer lower prices and buyer incentives to entice them," Berner says.

Last week, three major builders, PulteGroup, M/I Homes, and NVR, Inc., all reported major net income declines. That's caused many of them to be more selective about the markets where they're active, but they have also reported using incentives to entice buyers.

“The rapid increase in interest rates has stretched affordability even further, made selling an existing home even harder, and has pushed even more consumers to the sidelines,” PulteGroup CEO Ryan Marshall said as he reported the company's year-over-year net income dropped by 17% in the third quarter.

New-home sales remain muted

Still, the housing market is showing stress amid rising interest rates, even as the Federal Reserve seems primed to leave interest rates unchanged this month. The August sales figure was down 2% from a year ago. And the prices of new builds ticked up, with August's median sales price registering at $393,700, up 0.4% from July's $392,200.

Earlier this month, the National Association of Realtors® reported existing-home sales rose 1.5% on a monthly basis to a seasonally adjusted annual rate of 3.99 million. NAR Chief Economist Lawrence Yun said the tough market has resulted in higher inventory. That means more homes on the market competing with new builds.

Still, this year has been marked with falling builder confidence across the industry. The National Association of Home Builders (NAHB) and Wells Fargo reported that builder confidence in the market for newly built single-family homes fell three points to 29 this month.

Berner noted that builders are conservative in such a market, avoiding constructing homes that they won't sell quickly. For instance, the number of new homes for sale that have not yet been started hit 115,000. That's a record for the Census data. And the number of new homes under construction or completed is falling.

This keeps the market in buyer's territory. Builders are competing with a limited pool of interested would-be homebuyers. But unlike sellers, builders can't keep their inventory off the market until the market improves, Berner says.

So while those builders are slowing construction of new homes, there are still 111,000 new, completed homes for sale around the country.

"Home shoppers should consider new construction not only because of the competitive prices and incentives offered by builders, but also because of the lower total cost of ownership that newly built homes offer over the long run," Berner says.