New Home Sales Surge as Buyers Turn Toward Affordability and Inventory
In a bright spot for the U.S. housing market, new home sales jumped 10.9% in April 2025 to a seasonally adjusted annual rate of 743,000 units, according to a joint report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD). This marks the highest pace of new home sales since early 2021 and a 3.3% increase over April 2024 levels.
The surge comes amid continued softness in the resale market. The National Association of Realtors (NAR) reported that existing-home sales fell 0.5% in April to an annual rate of 4.00 million units—2.0% below the same month last year.
“The contrast between new and existing home sales is stark right now,” said Lawrence Yun, chief economist at NAR. “Despite a modest rise in inventory, the resale market remains constrained by affordability pressures and elevated mortgage rates. Buyers are increasingly turning to new construction for better value and availability.”
Prices and Inventory Shifts
The median sales price for new homes in April was $407,200—down 2.0% from one year ago, even though it edged up 0.8% month-over-month (HUD, April 2025). In contrast, the median price for existing homes reached a record high of $414,000, according to NAR’s April 2025 report.
With this pricing gap narrowing, builders are gaining ground by offering smaller, more affordable homes in desirable locations.
“Builders have been strategic in reconfiguring product lines to address affordability,” noted Danielle Hale, chief economist at Realtor.com. “This pivot is helping bring inventory and pricing into closer alignment with buyer expectations.”
At the end of April, there were approximately 504,000 new homes for sale—up 8.6% from the prior year. This equates to an 8.1-month supply at the current sales pace, according to HUD. The inventory of existing homes remains significantly tighter, with NAR reporting a 3.5-month supply.
Regional Breakdown
Sales gains were concentrated in the South, which continues to dominate the new home market. According to HUD, two-thirds of all new homes sold in April were in Southern states. The South posted an 11.7% month-over-month increase and a 6.5% year-over-year gain.
In contrast, the Northeast saw new home sales drop 14.8% from March and a steep 25.8% from April 2024, per HUD’s regional breakdown.
Local Market Spotlight: Orlando, FL
Central Florida mirrors these national trends. According to data compiled by the Orlando Regional Realtor Association and reported by Jean Scott Homes, April home sales in the Orlando area totaled 2,459 units—down 10.9% year-over-year but up 62.4% since January.
The median home price in the Orlando market held steady at $389,900, while inventory rose to 13,304 units, representing a 5.41-month supply. “This increase in inventory is critical to rebalancing the market,” said Jean Scott, a local Realtor and market analyst. “But it’s clear that many buyers are still being priced out of the resale market and looking at new homes instead.”
Mortgage Rates Still the Wild Card
Yun emphasized that mortgage rates remain the single most important factor affecting both new and resale activity. “At this critical stage of the housing market, it is all about mortgage rates,” he said in NAR’s pending home sales release. “Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring home buyers back into the housing market.”
Pending home sales—a forward-looking indicator of future transactions—fell 6.3% in April, with all four U.S. regions showing declines, according to NAR.
Outlook
The outlook for new construction appears cautiously optimistic. As builders continue to adjust to changing buyer preferences, and if mortgage rates moderate later this year, many industry experts anticipate continued growth in new home transactions.
“With resale inventory tight and affordability stretched, new homes are now a primary—not alternative—option for many homebuyers,” said Hale.
Sources:
- U.S. Census Bureau & HUD: www.census.gov/construction/nrs
- National Association of Realtors: www.nar.realtor
- Realtor.com Housing Trends: www.realtor.com/research
- Jean Scott Homes, Orlando Housing Report: www.jeanscotthomes.com
Written by David Fletcher, NHCB for www.RealtyTimes.com Copyright © 2025 Realty Times All Rights Reserved. Fletcher, a retired Realtor, spent his entire 25-year career recruiting, training, and supervising Realtors to serve as full-time onsite agents for more than 50 communities in Florida.
