New Home Sales: September 2026 Census Report

Builders sold new homes at a 676,000 annual pace in September, essentially flat with August and better than Wall Street expected, even as mortgage rates pushed past 7%.

That is the headline from the Census Bureau and HUD report released this morning. The story underneath it matters more: builders are buying their sales with price cuts and incentives, and that is reshaping the competitive landscape for every resale listing in a market with new construction nearby.

If you work with buyers or sellers, here is what the numbers say and what they mean for your next conversation.

The numbers

Sales slipped 0.6% from August and ran 5.3% below September 2025, but the Census Bureau flags both changes as statistically insignificant. In plain terms: demand for new homes is holding, not breaking.

A few details worth knowing before you quote these figures to a client:

• It beat expectations. Economists were looking for roughly 651,000 to 660,000. August was trimmed from its first estimate of 684,000.

• Year to date, sales are down 2.9% from the first nine months of 2025.

• Prices are falling on a year-over-year basis. The median is down 3.9% and the average is down 6.7%, the only change in the report Census calls statistically significant. The monthly jump in the median is mostly noise from a small survey sample.

• Supply is heavy. At 8.4 months, inventory sits well above the roughly six months most economists treat as balanced. Completed, ready-to-move-in homes for sale total about 111,000, more than triple the record low of early 2022.

  
  

One reminder for anyone comparing this to resale data: new home sales are counted when a contract is signed, not at closing. That makes this report one of the earliest reads on buyer demand we get each month.

What's driving it: builders are paying for demand

September contracts were signed as financing got more expensive. Freddie Mac's 30-year fixed rate crossed 7% in late September and averaged 7.32% as of October 22, more than a full point above the 6.19% of a year ago. Resale sellers can't do much about that. Builders can.

• Price cuts are at a cycle high. The latest NAHB Confidence survey (that I talk about here) said 43% of builders cut prices in October, the highest share since at least 2020, and 65% offered sales incentives.

• The product mix is shifting. Homes under $400,000 made up 51% of September sales, up from 46% a year earlier. Homes at $1 million and up fell to 4% from 6%. It looks as if builders are building smaller and cheaper to hit payments buyers can qualify for, which certainly explains part of the price decline.

• New is now cheaper than "used". The median new home price has been below the median existing home price for seven straight months. Meanwhile, FHFA and Case-Shiller both show existing home values still up a little over 2% year over year.

That last point is the one I'd underline. A resale seller pricing off last spring's comps is competing against a builder down the road offering a lower sticker price, a bought-down rate and a home that's ready now.

What it means for brokers, buyers and sellers

For buyer's agents: new construction deserves a look on almost every search right now. With 8.4 months of supply and builders motivated to move finished spec homes, buyers have negotiating room that rarely exists in resale. Ask builders about rate buy-downs, closing cost credits and upgrades, and compare the effective monthly payment, not just the price.

For listing agents: the builder is your competition. Price to today's market, not last year's. Where a resale seller can't match a builder's rate buy-down, a seller-paid concession can narrow the payment gap. Condition and move-in readiness matter more when the new home down the street has a warranty.

For buyers: the window is real but conditional. Price cuts and incentives are at their most generous when builders are carrying inventory, and that is today. If rates ease in 2027 as most forecasters expect, that leverage could fade quickly as sidelined buyers return.

Here in Washington State: the national report doesn't break out our state, and the West region figures weren't in the coverage available this morning. The dynamic will be sharpest in the suburban and ex-urban sub-markets where builders are active, rather than in close-in Seattle neighborhoods where new single-family construction is scarce. Either way, the national message holds: new construction is setting the competitive bar on price and financing.

The bottom line

September's report shows a new home market that is steady on volume but soft on price. Builders are keeping sales moving by absorbing the cost of 7% mortgages through price cuts, incentives and smaller homes. Until rates come down, expect that pressure to keep flowing into the resale market, especially in sub-markets with plenty of new construction.