New home sales ended on a strong note in 2025 with an increase in sales as builders provided incentives that lowered closing costs and encouraged buyers to enter the market.
Nationally in December, seasonally adjusted sales were 745,000, which is 3.8% above the December 2024 rate, Friday’s Census Bureau report showed. An estimated 679,000 new homes were sold in 2025 which is 1.1% lower than 2024.
This steady numbers show the resilience of the housing market and of home builders themselves, who have faced a tumultuous year of tariffs and supply chain disruptions and have been able to persuade buyers despite all.
“They can’t sell these homes for as much as they would like to but they can still sell them for a profit,” said Jeff Tucker, principal economist at Windermere Real Estate based in Seattle.
Builders are desperate to sell homes. Unsold inventory was building up this year and still remains high at 7.6 months of supply at the current sales rate, so builders have adapted with incentives.
Mortgage rate buydowns, where builders are fronting the cash that it takes to reduce the home buyers monthly payment, is one strategy. Another is closing cost assistance. These incentives squeeze the profit margins, costing up to $50,000. But, it ensures the affordability of the homes and takes the sting out of signing the mortgage.
“It makes a really big difference to ensure the affordability of that monthly payment for home buyers,” said Tucker.
The median sales price of new houses sold in December 2025 was $414,400, which is 2% below the December 2024 rate. Economists say that the lowering interest rate is the main reason in addition to builders creating enticing deals for buyers.
Interest rates hit their all-time lows in late 2020, but then came crashing down in 2022 when interest rates doubled. Buyers got cold feet.
“But now it seems we are moving into the long-term trajectory of building to fill in that missing housing supply the country needs,” said Tucker.
Despite the demand for housing, the average age of homeowners is soaring because millennials can’t afford homes.
“I still see some hesitation with people signing new home contracts but they are moving along,” said Eric Fox Chief Economist Veros Real Estate Solutions in Arizona.
Housing supplies, such as lumber from Canada, have also faced steep tariffs this year, which has left builders eating costs both ways: from the government and from the consumer.
And their resiliency is being tested again, with Trump announcing tariffs even though the Supreme Court struck them down. He is pressing ahead with 15 percent global tariffs, but the decision is still in limbo since the ruling. Businesses around the world are still uncertain of what to do. For new homes, how long builders can keep prices low remains to be seen.