New Home Sales Stayed Elevated in Late 2025 — But the 2026 Construction Pipeline Looks Fragile

New-home sales are holding up — even as affordability stays tight

New-home sales ended 2025 with a resilient pace that stands out in a market still constrained by affordability. In the government’s December 2025 report, sales of new single-family houses were estimated at a seasonally adjusted annual rate (SAAR) of **745,000**. That was **1.7% below** November’s pace but **3.8% above** December 2024. [census.gov]

For the full year, the same release estimated **679,000** new homes sold in 2025, down **1.1%** from **686,000** in 2024. That’s not a boom, but it is notable stability given how rate-sensitive the market has been. [census.gov]

Inventory is present — but not abundant

The same Census/HUD release estimated **472,000 new houses for sale** at the end of December 2025. At the current sales pace, that works out to **7.6 months of supply** — lower than a year earlier but still above what many analysts consider a “balanced” six-month level. [census.gov]

A key nuance: a growing portion of listings are finished homes. Builder-reported commentary and industry tracking have highlighted more completed, ready-to-occupy product being available than during the ultra-tight period of 2021–2022, which can make new homes feel more like existing homes (faster move-in, fewer construction unknowns). [eyeonhousing.org]

Incentives are helping demand clear today’s affordability bar

If you’re wondering how sales can stay near multiyear highs while affordability remains strained, incentives are a big part of the answer. One late-2025 snapshot showed a large majority of builders using sales incentives, along with average price reductions. [eyeonhousing.org]

In practice, this often shows up as mortgage-rate buydowns, closing-cost credits, and selective base-price cuts — tools that can reduce the monthly payment without requiring a big, across-the-board list-price reset. That’s one reason new homes have been able to compete even when existing-home inventory is limited. [housingwire.com]

The pipeline risk: permits and single-family activity

Sales tell you what’s happening now. Permits and starts help tell you what’s likely to be available later. That’s where the story looks more fragile.

In a separate analyst-focused read of the December construction data, total housing starts rose **6.2% month over month** to **1.40 million SAAR**, but were still reported **down 7.3% year over year**. The same analysis noted **single-family starts** were **down 9% year over year** to **981,000**, and highlighted **single-family permits** falling **10.9% year over year** even as multifamily permits rose. [benzinga.com]

This matters because if single-family permits don’t stabilize and grow, the market can end up leaning on a smaller set of builders and communities for future inventory. That can keep pressure on prices and limit the pace at which new construction can ‘backfill’ the resale shortage.

What to watch next

Three near-term signals will help confirm whether 2026 supply growth can hold:

• **Permits trend**: a few months of improvement is more meaningful than a single bounce.
• **Completed inventory**: whether finished homes keep rising as a share of listings, supporting faster absorption.
• **Price distribution**: whether builders can keep producing at the lower end without margin stress, which would support broader affordability.

Bottom line: new-home sales are steady and incentives are working, but the single-family pipeline remains the swing factor for how much additional supply the market can realistically get in 2026. [census.gov]