(Oct 27): Sales of new homes in the US edged lower last month as homebuilders’ efforts to trim prices and offer sales incentives failed to offset a surge in mortgage rates.

New single-family home sales decreased 0.6% in September to an annualised rate of 676,000, according to figures released on Tuesday by the federal government. That beat the median estimate of 651,000 annualised sales in a Bloomberg survey of economists. 

The median sales price of a new home fell 3.9% from a year ago to US$400,400 (RM1,634,693), the seventh of nine months so far in 2026 to show a year-over-year price decline.

September’s dour sales figures reflect the gravity of the challenges facing the housing market. Mortgage rates rose about a half-point last month — reaching the highest level in almost three years in early October — and have eased only slightly since then. The surge in borrowing costs has sapped demand among would-be homebuyers and helped drive a measure of homebuilder confidence to the lowest level in 14 years.

Entry-level buyers are especially sensitive to increases in financing costs, making builders that cater to them such as DR Horton Inc and Meritage Homes Corp more vulnerable, Bloomberg Intelligence analyst Drew Reading said in research published last week. Builders are struggling to keep customers motivated, offering smaller homes and subsidized mortgage rates to offset poor affordability.

With customer demand so weak, builders have only slowly worked down the supply of new homes on the market. Last month, the inventory of new homes for sale dropped 2.3% from a year ago to 476,000, according to Tuesday’s figures. That represents 8.4 months of supply at the current sales pace, the least so far this year but still well above pre-pandemic levels.

New-home sales in the South, the nation’s biggest home-selling region, fell 6.6% to an annualised 413,000. Sales in the Midwest also fell, offsetting gains in the West and the Northeast.

New-home sales are seen as a timelier gauge than purchases of existing homes, which are calculated when transactions close. However, the data are volatile on a monthly basis. The government report showed 90% confidence that the change in new-home sales ranged from a 14.4% decline to a 13.2% gain.

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