New Home Sales Picked Up in November, December

New home sales rose on balance in the final two months of 2025, according to a Wells Fargo Economics Report.

Accounting for modest giveback in December, a surge in transactions in November lifted new home sales 3.8 percent above their year-ago level, the report said.

It added:

• Yet in 2025 as a whole, the annual average of new home sales ended up 1.1 percent below 2024. Stubbornly high mortgage rates, cooling labor market fundamentals and economic uncertainty weighed on demand.

• The year-end increase in momentum was likely supported by a modest reduction in financing costs. The average 30-year fixed mortgage rate slid from 6.8 percent in June to 6.2 percent in December, reaching its lowest level in more than a year.

• Mortgage rates have continued to recede since, most recently averaging 6.0 percent during the week of February 19. Although this progress is encouraging, mortgage rates remain above pre-pandemic trends and are unlikely to fall much further, in our view.

• Roughly two-thirds of builders reported using incentives like price cuts or mortgage rate buy-downs in November and December, a share that persisted through the first two months of 2026. Combined with builders’ poor sales expectations, the prevalence of sales incentives implies that buyer demand remains soft.

• The median sale price for a new single-family home rose slightly in December but was down 2.0 percent on a year-to-year basis. The annual decline reflects builder price discounts.

• New home inventory eased somewhat but remains elevated. Months' supply registered at 7.6 months in December, well above historical averages.