U.S. New Home Sales Lose Steam; Supply Piles Up — Evening Brief – 06.24.26

U.S. new home sales slowed sharply in May, undershooting expectations and adding to signs of cooling in the housing market as inventory edged higher and pricing sent mixed signals for builders and buyers. The latest federal data also showed the U.S. current account deficit widened modestly at the start of the year.

U.S. new home sales came in at a seasonally adjusted annual rate of 580,000; a 7.3% drop from April’s revised figure of 626,000 and a 6.8% decline from a year earlier, according to Census Bureau data released Wednesday. The result missed the 640,000 analyst consensus by a wide margin.

Slowing demand pushed inventory higher. The seasonally adjusted estimate of new homes for sale at the end of May reached 496,000, up 2.3% from April, representing 10.3 months of supply at the current sales rate — 10.8% more than the prior month and 6.2% above the May 2025 level.

Prices told a different story. The median sales price of new homes rose 2.0% from April to $424,900, roughly flat compared with a year ago. The average sales price climbed more sharply, rising 7.8% month-over-month to $540,600 — a 5.0% year-over-year gain — suggesting the mix of homes sold skewed toward higher price points.

The U.S. current account deficit held nearly flat at $226.8 billion in Q1 2026, the Bureau of Economic Analysis reported Wednesday, just below the $227.0 billion consensus and modestly wider than the revised Q4 deficit of $221.1 billion. The deficit equaled 2.9% of current-dollar GDP, up from 2.8% in the prior quarter.

The slight widening reflected a swing in primary income — from a surplus in Q4 to a deficit in Q1. Exports of goods, services, and income received from foreign residents rose $50.0 billion to $1.38 trillion, while imports and income paid to foreign residents increased by a larger $55.8 billion to $1.61 trillion.