High mortgage rates, rising construction costs and economic uncertainty continue to deter many potential home buyers during this summer season.

Sales of newly built single-family homes edged 0.6% lower in July, falling to a seasonally adjusted annual rate of 652,000 from an upwardly revised reading in June, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is down 8.2% from a year earlier.

A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the July reading of 652,000 units is the number of homes that would sell if this pace continued for the next 12 months.

New single-family home inventory held steady at 499,000 residences marketed for sale as of July. This is 0.6% lower than the previous month, and 7.3% higher than a year ago. At the current sales pace, the months’ supply for new homes remained elevated at 9.2 compared to 7.9 a year ago. A measure near a six months’ supply is considered balanced.

On a year-to-date basis, new home sales are 4.0% lower thus far in 2025. As a result of slowing home sales conditions, inventory remained elevated in July at a 9.2 months’ supply.

As estimated by NAHB, total months’ supply, defined as a combination of current new and resale single-family inventory, now stands at 5.2. This is the highest sales-adjusted inventory level since 2015 and will place downward pressure on housing construction starts in the months ahead.

A year ago, there were 99,000 completed, ready-to-occupy homes available for sale (not seasonally adjusted). By the end of July 2025, that number increased 19.2% to 118,000. However, completed, ready-to-occupy inventory remains just 23% of total inventory, while homes under construction account for 54%. The remaining 22% of new homes for-sale in July were homes that had not started construction when the sales contract was signed.