High mortgage rates, tariff uncertainty and job insecurity have been weighing on prospective homebuyers’ minds and dragging new-home sales down, according to a report released Wednesday by Zonda.
Noting that housing affordability is “holding at the worst level in 30 years,” Zonda reported that April new-home sales were flat month over month and fell 6.9% compared to the prior year.
While economic uncertainty persists, Zonda Chief Economist Ali Wolf said tepid homebuying demand has been partially offset by builder incentives and price cuts.
“New-home sales have been choppy to start the year but remain above 2019 levels,” Wolf stated. “Today’s sale volume levels are fueled by the fact that builders are motivated sellers, though. Builders continue to offer incentives to drive sales, but we’re seeing price cuts play a larger role in some areas.”
Zonda found that 35% of builders cut home prices in April, 49% held prices flat and 16% raised prices. In March, 32% of builders lowered prices, 53% kept prices steady and 15% hiked prices.
Quick move-ins (QMIs) — homes under construction that can likely be occupied within 90 days — continue to be a popular incentivization tool for builders of new-home communities. Last month, there were 2.3 QMIs per community, which is up 22% from April 2024. However, the level of quick move-in inventory is down 9% from its 2022 peak, according to Zonda.
“For many consumers, QMIs provide a great option given the lack of resale supply,” the report noted. “As a result, some builders have pivoted to a more spec-heavy strategy to help capture today’s buyers.”
Metro areas with the largest increases in quick move-in inventory compared to last year include Seattle at 113.7%; Charlotte, N.C., at 72.6%; and Washington, D.C., at 65.6%.
