US new home sales fell more than expected in May, with rising inventory

From Yahoo Finance: 2025-06-25 10:56:00

Sales of new U.S. single-family homes dropped 13.7% in May, falling to an annualized rate of 623,000 units. Economists had expected a decline to 693,000 units. Mortgage rates remained high, contributing to a supply of unsold homes reaching 507,000 units, the highest since 2007.

The Federal Reserve paused its interest rate cutting cycle due to economic uncertainty from Trump’s tariffs. Chair Jerome Powell warned of potential inflation from tariffs and said the Fed was not rushing to resume rate cuts. Mortgage rates stayed around 7% in May, contributing to the slowdown in new home sales.

Construction permits for single-family housing hit a two-year low in May. The National Association of Home Builders reported a decline in sentiment among builders, with more cutting prices to reduce inventory. Economists expect a contraction in residential investment in the second quarter after a slight decline in the first quarter.



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