New-home sales remained relatively flat to end 2025, according to Zonda, bringing an end to a year that was characterized by affordability challenges and weak consumer confidence.
Despite an increase in new-home supply during the year, a lack of improvement in affordability contributed to muted sales and forced builders to lean more heavily on price cuts and financing incentives.
According to Zonda’s New Home Market Update, new-home sales declined 1.5% month-over-month and 0.4% year-over-year to a seasonally adjusted annualized rate of 705,682. On a non-seasonally adjusted basis, 54,021 homes were sold, 0.4% higher than last year and 11.8% above the same month in 2019.
After a difficult year for builders, the outlook for 2026 is mixed. The labor market is cooling at the same time mortgage rates are finally showing signs of improvement. Greater discipline from builders has also prevented the type of supply surplus seen in past housing cycles. According to Zonda, if lower rates draw in entry-level and high-equity buyers back into the fold, the housing market may finally find its floor.
“As we look for an early read on the 2026 spring selling season, core metrics such as home prices, listings, quick-move in supply, affordability, and sales will remain top of mind,” says Ali Wolf, chief economist for Zonda. “Beyon those, though, we believe consumer confidence, the directional trend of mortgage rates, and federal policy changes will play an outsized role in shaping the housing market this year.”
Zonda’s New Home Pending Sales Index (PSI) declined 6.5% year-over-year to a reading of 130.1 in December. The PSI accounts for fluctuations in supply by combining total sales volume and the average sales rate per month per community. Among the markets analyzed by Zonda, Salt Lake City (+24.3%), Minneapolis (+3.4%), and San Antonio (+3.2%) experienced the greatest improvement in PSI compared to December 2024. The metros that performed the worst year-over-year were Cincinnati (-32.6%), Washington, D.C. (-25.7%), and New York (-23.9%).
To provide further context to sales, Zonda created the Zonda Market Ranking (ZMR), a seasonally adjusted metric that accounts for sales pace and volume taken as a percentage relative to a baseline market average. The national ZMR ranked as “average” in every month of 2025, generating a reading of 101.5 in December.
According to Zonda, new-home prices fell in the entry-level (-1.6%) and move-up (-0.2%) categories, but increased in the high-end (+3.5%) home category on a year-over-year basis. The increase in high-end home prices reflects new communities opening at higher price points, larger lots and home sizes, and improvements in design quality.
A supplemental survey conducted by Zonda found 26% of builders lowered prices in December, down from 37% of builders in November. In December, 60% of new-home communities offered incentives on to-be-built homes and 78% of communities offered incentives on quick move-in supply.
National quick move-in supply—homes that can likely be occupied within 90 days—totaled 34,840 in December, up 4.4% on a year-over-year basis. Total QMIs are 61.8% above 2019 levels. QMIs represent an attractive alternative to the resale market for many consumers given similar move-in timelines and builder incentives. On a metro basis, 76% of Zonda’s select markets increased QMI count year-over-year.
