Higher mortgage rates and elevated prices appear to have pushed would-be buyers out of the housing market in May, dragging down new U.S. single-family home sales below what economists had expected.
The Census Bureau and the Department of Housing and Urban Development said sales came in at a seasonally adjusted annual rate of 580,000 units in May, down 7.3% from April's rate of 626,000 and 6.8% below the May 2025 rate of 622,000.
The median price of a new home sold in May was $424,900, up 2.0% from April's $416,500 but virtually unchanged from $424,800 a year earlier. The average sales price rose to $540,600, up 7.8% from April and 5.0% above the year-ago figure.
Inventory edged higher, with an estimated 496,000 new homes for sale at the end of May, up 2.3% from April. At the current sales rate, that represents a 10.3-month supply, up from 9.3 months in April.
The U.S.-led war with Iran, which began at the end of February, set off a chain reaction that sent oil prices, inflation, and Treasury yields upward, putting upward pressure on borrowing costs. Freddie Mac data cited by Reuters show the 30-year fixed mortgage rate stood at 6.47% last week, reflecting a cumulative increase of roughly half a percentage point traced to the onset of that conflict.
New home sales make up only a small part of overall U.S. housing activity, and the numbers can change a lot from one report to the next. This measure reflects when contracts are signed.