U.S. New Home Sales Surge to Three-Year High, But Economic Clouds Loom
Sales of new U.S. single-family homes jumped unexpectedly in April to the highest level in over three years, as homebuilders slashed prices and offered incentives to lure wary buyers amid rising mortgage rates and deepening economic uncertainty.
According to Reuters, The Commerce Department reported Friday that new home sales rose 10.9% last month to a seasonally adjusted annual rate of 743,000 units, the strongest reading since February 2022. The increase surprised economists, who had forecast a decline to 693,000 units, according to a Reuters poll. However, significant downward revisions to February and March data tempered the headline gain, highlighting persistent volatility in the sector.
While the April figures appear strong on the surface, analysts warn that the rebound may be short-lived. Economists say higher borrowing costs, slowing job growth, and growing anxiety over the broader economic outlook — intensified by President Donald Trump’s renewed tariff threats — are likely to weigh on housing demand in the coming months.
“Strength in new home sales does not change our view that housing activity is weakening further in the second quarter and is likely to remain soft this year,” said Veronica Clark, economist at Citigroup.
Trump’s Tariff
Trump’s latest threat to impose a 50% tariff on EU imports starting June 1, as well as a possible 25% tariff on iPhones made outside the U.S., added to investor jitters. Stocks declined on the news, while Treasury yields and the U.S. dollar also weakened.
Builders are responding to the uncertain environment by aggressively cutting prices. The median new home price dropped 2.0% year-over-year to $407,200 in April. The National Association of Homebuilders recently noted that price cuts in May were at their highest level in nearly 18 months.
Regional data showed strong sales growth in the Midwest (35.5%) and South (11.7%), while sales in the Northeast tumbled 14.8%.
Most of the homes sold were either under construction or already completed, and the bulk were priced between $300,000 and $399,999 — a sign that affordability remains a critical concern for many buyers.
Despite April’s jump, housing market analysts remain cautious. With mortgage rates approaching 7% and economic growth forecasts trending lower, the outlook for the remainder of 2025 suggests that the U.S. housing sector is still on fragile ground.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
