Builders Have More Homes To Sell—Buyers Still Can’t Afford Them

New home inventory is rising, but high construction costs and mortgage rates still put too many of them beyond buyers’ monthly budgets.

America has spent the better part of the decade waiting for more new homes to come to market. Now they’re here, and buyers still aren’t biting.

That mismatch came to the forefront this week as new data showed a growing supply of unsold new homes, even as builders offer incentives to move them. But the monthly cost of homeownership remains too high for many households to act.

It’s an especially salient tension after President Donald Trump abruptly canceled a planned signing ceremony for the bipartisan 21st Century Road to Housing Act—a sweeping package meant to make it easier and less expensive to build, finance, and buy homes.

The bill may yet become law. But for households trying to buy now, its delay underscores why reforms of that scale are so urgent. Here are five numbers that help explain why.

Contract signings for newly built homes fell to a seasonally adjusted annual rate of 580,000 in May, the U.S. Census Bureau and Department of Housing and Urban Development reported Wednesday, in a sign that buyers are showing less willingness to commit, even with more newly built homes available.

That marks a 7.3% fall from April and a 6.8% dip from a year earlier—just 4,000 above January’s low-water mark for the year, when punishing winter storms cooled the market.

New-home sales are generally counted when a buyer signs a contract or puts down a deposit, rather than when the deal closes. That makes the figure a relatively immediate measure of whether households are willing to commit to buying now.

And in May, fewer were. The pullback was sharpest in the West, where new-home sales fell 26.9% from April and 17% from a year earlier. The Northeast and Midwest posted monthly gains, while the South saw a smaller decline.

Even so, the median price of a newly built home rose 2% month over month in May to $424,900 and remained virtually unchanged from a year earlier—signaling that growing supply hasn’t delivered the broad price relief that buyers were looking for.

While it may seem counterintuitive for contracts to stall and prices to rise, that monthly increase doesn’t necessarily reflect builders raising prices. Median prices can move with the mix of homes sold in any given month, including differences in size, location, and price tier.

Still, the larger message is clear: Even as demand weakened, buyers didn’t get a meaningful national price break because the cost of building is still too high.

“These disappointing new-home sales figures reflect a challenging market of increased costs that make delivering affordably priced inventory difficult, as evidenced by the share of sales under $300,000—down from last May with basically the same median price,” Realtor.com® senior economist Joel Berner explains.

And that’s where the Road to Housing Act could offer a solution. Among its more than 60 provisions is a broad push to reduce barriers to construction. That could help make smaller, more affordable homes more feasible for builders to produce—and less expensive for buyers to purchase.

The month’s supply of new homes available for sale hit 10.3 months in May at the current pace of sales. And as builders sit on that growing inventory, they’re already slowing the construction that would replenish tomorrow’s supply.

That’s up from 9.3 months in April and 9.7 months a year earlier, leaving builders with a larger cushion of unsold inventory even as buyer demand weakened.

“The new home market is firmly in buyer’s market territory and moving even further that way,” Realtor.com senior economist Joel Berner says.

In response, builders appear to be pulling back on future construction. Single-family housing starts last month were at a seasonally adjusted annual rate of 882,000, down 1.9% from April and 6.7% from a year ago, the U.S. Census Bureau reported Tuesday.

Total housing starts in May also experienced a significant pullback, plunging 15.4% month over month and 8.7% year over year to a seasonally adjusted annual rate of 1.17 million units, driven by a sharp decline in the multifamily sector.

That pullback raises the stakes for the bill’s supply measures: The country needs a way to make lower-cost construction viable before today’s unsold inventory becomes tomorrow’s smaller pipeline.

The average rate on a 30-year fixed mortgage hit 6.49% for the week ending June 25, dampening demand even as supply rises.

That rate was up slightly from 6.47% the week before, according to Freddie Mac, although still below the 6.77% average recorded during the same week last year.

For buyers, the more consequential fact is that rates have remained in the mid-6% range, keeping monthly payments high even as the market has become less competitive.

That helps explain why new-home inventory can rise without producing a wave of sales. Buyers may have more homes to choose from and more room to negotiate, but the mortgage payment still determines whether a purchase works.

The Road to Housing Act can’t bring down mortgage rates on its own, but it includes provisions intended to make financing more accessible for some borrowers.

Among them is a directive for regulators to examine whether rules around loan-officer compensation and caps on points and fees are discouraging lenders from making low-balance loans, which can be less profitable to originate despite being critical for buyers in lower-cost markets.

It also raises the amount certain banks can invest in affordable-housing projects, potentially expanding the capital available to build or preserve lower-cost homes.

“Deregulation creates risk, but it may also allow banks to offer more competitive rates to borrowers if they choose to pass the savings along to their consumers,” Realtor.com senior economist Joel Berner says.

President Trump will have 10 days to sign or veto the 21st Century Road to Housing Act once it is formally presented to him—offering a narrow window for Washington to address the cost and financing barriers the market is struggling to solve on its own.

A spokesperson for House Speaker Mike Johnson confirmed to Realtor.com that Johnson plans to formally submit the bill to Trump, but did not specify when. If Trump takes no action during that window, the bill would become law without his signature, provided Congress remains available to receive a veto.

The delay has frustrated lawmakers, who see the bipartisan measure as one of the most comprehensive housing packages in decades—and one arriving at a moment of acute need. Still, lawmakers appear to be working with the White House to get it across the finish line.

“The president, when we go through the details of the bill, he’s going to understand that it’s a good product,” House Speaker Mike Johnson said. “And certainly something that fulfills his promises to bring down the costs.”