According to Realtor.com Research, new home sales edged up slightly in June compared to May, hitting an adjusted annual pace of 628,000 units. While this represented a modest monthly gain, the picture looks considerably weaker when you compare it to the same month last year. Year over year, sales actually declined, and we're seeing what I'd call a buyers' market right now with nearly a decade's worth of housing supply available.
One of the most telling signs is what's happening with pricing. New homes are moving at a median price of $398,300, which sits noticeably below what existing homes are fetching at $440,600. Builders are being far more aggressive with discounts and incentives than sellers of existing homes are willing to be, and they're doing this because they're competing fiercely for buyers who are increasingly stretched by affordability pressures.
The regional breakdown tells an important story, particularly for those of us out West. Sales in our region dropped sharply in June compared to both the previous month and last year, down significantly on both measures. Year to date, Western sales are running behind the 2025 pace. It's worth noting that inventory out West has actually recovered to levels exceeding what we had before the pandemic, which is creating intense competition between builders and existing home sellers fighting over fewer qualified buyers.
What's interesting is how builders are responding to these pressures. They're being selective about what they build and finish, with more unstarted homes on inventory now than at any other point this year. Many builders have decided to pull back on speculative building, choosing not to get stuck with completed homes they can't move quickly. The number of completed homes for sale has stayed relatively flat while unstarted homes have climbed.
What I am seeing locally is that while June showed some stabilization month to month, the broader trend here in the Bay Area and East Bay remains challenging for new construction. The incentives and price cuts from builders present real opportunities for buyers who can act, especially those looking at new builds where you might find better value than in our competitive existing home market. However, builders themselves are navigating a tough squeeze where rising construction costs meet softening buyer demand and serious competition from the existing inventory that's now available out here.
