US New-Home Sales Drop by Most Since 2022 on Poor Affordability

US purchases of new homes fell in May by the most in almost three years as rampant sales incentives fell short of alleviating affordability constraints.

Sales of new single-family homes decreased 13.7% to a 623,000 annualized rate last month, a seven-month low, according to government data released Wednesday. That was below all estimates in a Bloomberg survey.

The latest results show homebuilders are sitting on rising inventories amid mounting economic challenges, including mortgage rates stuck near 7%, higher materials costs due to tariffs and a slowing labor market. While builders are offering subsidies to reduce customers’ financing costs, the ...