Sales of new single-family homes held steady in October, maintaining a healthy pace that economists attribute to easing mortgage rates and increased builder incentives.

The seasonally adjusted annual rate of new-home sales came in at 737,000 for the month, virtually unchanged from September’s revised rate of 738,000, according to data released Tuesday by the U.S. Census Bureau and the Department of Housing and Urban Development.

Despite the flat month-over-month performance, sales activity shot up 18.7% compared to October 2024, when the seasonally adjusted rate stood at 621,000 units.

According to a research note from Wells Fargo, the improvements seen in August and September have lifted new-home sales activity near its highest level since May 2023. The analysts point to a “step-up in builder incentives” and a shift toward more affordable inventory as key drivers sustaining the momentum.

The Census Bureau data confirms a distinct shift toward lower price points, which has likely supported the overall sales volume. The median sales price of new houses sold in October was $392,300, a decrease of 3.3% from September and an 8% drop from the October 2024 median of $426,300.

This price decline correlates with a change in the mix of homes being sold. In October 2025, homes priced under $300,000 accounted for 25% of all transactions, which is a significant increase from a year ago, when the price tier made up only 14% of sales.

Despite the sales stability, Wells Fargo economists Charlie Dougherty, Jackie Benson and Ali Hajibeigi warned that home builders will “likely remain cautious on significantly ramping up production.”

The count of new houses for sale at the end of October was 488,000, unchanged from September and up 1.7% from a year prior.

At the current sales pace, this inventory represents a 7.9-month supply. While this supply level has tightened significantly from the 9.3-month supply recorded in October 2024, the number of unsold homes remains elevated by historical standards.