New-home prices fell to their lowest level in four years during the fall, as builders continued to cut prices and expand incentives amid ongoing affordability challenges, according to a report released by Realtor.com using U.S. Census Bureau data. The report was delayed due to the federal government shutdown in October.
The median sales price for new homes that went under contract in October was $392,300, down 8% from the same period a year earlier and the lowest level since 2021, according to figures cited by the Census Bureau and Realtor.com.
New-home prices have trended downward since late 2022, following a period when affordability challenges priced many buyers out of the market. In response, builders adjusted pricing strategies and increased incentives to attract buyers.
Builders Expand Discounts and Incentives
Builder pricing behavior reflects those affordability pressures. Realtor.com reported that 40% of builders cut prices during the most recent reporting period. Additionally, 67% offered sales incentives, including mortgage rate buydowns, according to the leading survey of homebuilder sentiment.
Joel Berner, senior economist at Realtor.com, said affordability remains the primary constraint in the housing market. He noted that builders are actively delivering lower-priced new inventory, which has helped attract buyers in ways that existing-home sellers have not matched.
Berner also pointed out that new homes have sold for less than existing homes since June, reversing a long-standing trend. Prices for existing homes have remained relatively firm, while builders continue to adjust pricing.
According to Berner, two factors contribute to the shift. Builders tend to be more motivated sellers than homeowners, many of whom choose to delist rather than reduce prices. At the same time, builders continue to deliver smaller and more affordable homes, often in lower-cost areas.
Lower Prices and Rates Support Sales Activity
Sales activity reflected improved affordability conditions. New single-family home sales reached a seasonally adjusted annual rate of 737,000 units in October, according to Realtor.com’s summary of Census Bureau data. While sales were little changed from the prior month, they increased 19% year over year.
Mortgage rates also declined. Freddie Mac data cited by Realtor.com shows average mortgage rates fell to 6.25% in October, down from 6.43% in October 2024.
With a 10% down payment, the typical monthly mortgage payment for new homes sold in October was about $2,170. That figure was roughly $240 lower than the monthly payment for new homes purchased one year earlier.
Regional Sales Trends
Sales performance varied by region. Realtor.com reported that the South posted a 42.1% year-over-year increase in new-home sales, while the Midwest recorded a 21.3% gain. In contrast, sales declined in other regions. The Northeast experienced a 40.0% decline, and the West saw a 24.8% decrease.
Berner noted that regional dynamics can influence national sales figures. Because a large share of new-home sales occurs in the South, strength in that region can offset weaker activity elsewhere. He added that October marked the strongest month of 2025 for new-home sales in the South, even on a non-seasonally adjusted basis.
Report Timing
The October new residential sales report was released later than usual due to the federal government shutdown. Realtor.com noted that the release also included preliminary data for September.
The report outlines current pricing trends, builder activity, mortgage conditions, and regional sales patterns based on the most recent available data.
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