Sales of newly constructed homes picked up 3.8% on an annual basis in December to notch a seasonally adjusted annual sales pace of 745,000 units, new government estimates published Friday indicate.
That figure represents a 1.7% slowdown from November’s pace of 758,000 units but a 1% increase from the 737,000-unit pace in October. An estimated 679,000 newly built homes were sold in 2025, a decrease of 1.1% from the 686,000 sold in 2024.
Interruptions from the federal government shutdown last fall caused official reporting on the new construction market in November and December to be delayed.
Sales totals released Friday by the U.S. Census Bureau and Department of Housing and Urban Development outstripped advance estimates for December sales released by the Mortgage Bankers Association (MBA), which had reported a new-home sales pace of 755,000 units in November tumbling to 640,000 in December.
Despite the monthly slowdown in sales, U.S. home builders saw their inventory backlog shrink from 485,000 in November to 472,000 in December, down 3.5% over the year.
Months’ supply of new homes for sale, which represents how long it would take to exhaust standing inventory at a given sales pace, shrank from 8.2 months in October to 7.6 months in December, signaling a buyer-friendly new-home market.
Shutdown-delayed reports on new-home starts, permits and completions for the end of 2025 were also released this week by government agencies.
Single-family housing starts rose 4.1% from November to December but remained 9% lower than year-ago levels. Permits declined 1.7% monthly and were nearly 11% lower than year-ago levels.
On a full-year basis, single-family construction slowed measurably in 2025 from 2024, with starts dropping 6.9% during the year, permits decreasing by 7.4% and completions of single-family homes sliding 0.8%.
The National Association of Home Builders reported on Monday that home builders’ six-month sales outlook had deteriorated in January, due to persistent purchase affordability barriers, though fewer builders reported the use of price reductions in sales last month.
That being said, the MBA also reported this week that mortgage applications for new-home purchases saw a strong rise in monthly demand, jumping 19% from December to January to land roughly 2% higher from year-ago levels.
