You know, according to Zillow Research, we're seeing some pretty significant shifts in the new home market right now. New home sales did edge up slightly in June on a monthly basis, but when you look at the bigger picture, the year-to-date numbers are telling a much different story. In fact, through the first half of this year, we're looking at the weakest pace for new home sales since 2017.
What's happening underneath all this is pretty straightforward. Fewer households are actually forming right now. When mortgage rates stay elevated, job growth softens, and prices for everyday goods remain sticky, people change their behavior. Young adults and first-time buyers are choosing to stay with family, share living spaces, or simply delay buying a home rather than taking the leap on their own. That mobility we saw surge during the pandemic has really cooled down significantly.
The builders themselves are under real pressure too. Even though they're completing more single-family homes on a year-over-year basis, sales aren't keeping pace, which means inventory is piling up. We're looking at levels of new homes for sale that we haven't seen in over a decade, and at current sales rates, it would take almost nine and a half months to work through what's available. To move that inventory, builders are offering incentives like mortgage rate buydowns, which eats into their margins while construction costs keep climbing.
Here's something that concerns me looking at the broader national picture. The country actually has a significant shortage of about 4.7 million homes overall, but new construction is heavily concentrated in the South and Sun Belt regions where land is abundant and zoning is more flexible. That's not where the greatest housing needs are. Coastal metro areas, which is where we are, face much tighter constraints.
What I'm seeing locally here in the Bay Area and East Bay is that this national slowdown in new construction and household formation creates both challenges and opportunities. On one hand, existing home inventory remains relatively constrained, which continues to support values for those holding property. On the other hand, if mortgage rates stay elevated and people keep delaying major life moves, we may see the market simply settle into a steadier, more modest pace of activity rather than returning to the peaks we experienced in recent years.
