Elevated borrowing costs, rising inflation and broad economic uncertainty continue to curb buyer demand and hold back new home sales.
Sales of newly built single-family homes declined 10.5% in July to a seasonally adjusted annual rate of 607,000, following a sharply upwardly revised June estimate, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales was 6.3% lower than a year earlier.
“New home sales fell in July to their slowest pace since the start of the year as affordability challenges limited home buyer traffic,” said Bill Owens, chairman of the National Association of Home Builders (NAHB) and a home builder and remodeler from Worthington, Ohio.
“NAHB surveys show that a majority of builders continue to offer sales incentives, including mortgage rate buydowns, to support new home sales.”
“The single-family home building market is on track for a second consecutive annual decline in 2026,” said NAHB Chief Economist Robert Dietz.
“New home sales are down more than 4% on a year-to-date basis. NAHB research and economic data show community builders continue to outperform the broader market, while the Northeast remains a relative bright spot, with new home sales up nearly 9% year-to-date.”
A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the July reading of 607,000 units is the number of homes that would sell if this pace continued for the next 12 months.
New single-family home inventory in July rose to 488,000 units, up 1.9% from June, and down 1.6% compared to a year ago. This represents an elevated 9.6 months’ supply at the current building pace, the highest measure since January.
The median new home sales price in July fell 2.3% from June to $393,800 and was down 0.9% from a year ago.
The new home sales market is showing relative strength at the higher end of the market. The market share of new home sales priced above $800,000 increased from 5% a year ago to 8% in July.
Regionally, on a year-to-date basis, new home sales are up 8.8% in the Northeast but fell in the other three regions, with declines of 6.4% in Midwest, 3.7% in the South and 6.4% in the West.
PRESIDENT'S MESSAGE
Strength in Numbers: Help Us Grow the EPAB Family
Every other year, members of the Texas homebuilding industry have a unique opportunity to take our message directly to the people who make decisions that impact our businesses. I encourage every El Paso Association of Builders member to join us in Austin for the Texas Association of Builders' Rally Day on February 23, 2027.
Rally Day gives members the opportunity to meet face-to-face with elected officials, learn about current legislative priorities, and share real-world experiences from the front lines of the housing industry. Those personal conversations help lawmakers understand how proposed legislation affects builders, developers, suppliers, and ultimately Texas families seeking attainable housing.
Before attending my first Rally Day, I understood the importance of advocacy in theory. After experiencing it firsthand, I came away with a much greater appreciation for the impact our voices can have. Sitting down with our state representatives and their staff to discuss the challenges facing the homebuilding industry was invaluable. Those conversations weren't political debates—they were meaningful discussions about housing affordability, workforce development, infrastructure, and the regulations that directly affect our ability to build homes and serve our communities.
As EPAB members, we are fortunate to have strong representation at the local, state, and national levels, but advocacy only works when members participate. Legislators want to hear directly from the people creating jobs, investing in our communities, and helping Texans achieve the dream of homeownership. There is simply no substitute for being in the room and telling our story.
I can personally say that Rally Day was one of the most rewarding experiences I've had as part of our association. I left Austin with a better understanding of the legislative process, stronger relationships with our elected officials, and confidence that our industry's voice truly matters.
I hope you'll join your fellow EPAB members next February. Together, we can ensure the homebuilding industry has a strong voice at the Texas Capitol and continue protecting the future of housing in Texas.
GUEST COLUMN
What Water Budget Cuts Could Mean for Development
A Message from a Past President
Carlos Villalobos, 2016 PresidentEl Paso Association of Builders - Pointe Home
El Paso Water is entering a critical budget season as the utility and te City of El Paso face increased public scrutiny related to the data center developments, recent concerns over water and wastewater line breaks, and broader community frustration with rising utility costs.
A small but vocal group has urged the Public Service Board (PSB), which governs El Paso Water, to limit or avoid future water and wastewater rate increases. In response, the PSB has asked El Paso Water to evaluate budgets with significantly reduced or no rate increases.
El Paso Water has cautioned that these scenarios would require substantial cuts to its capital program, potentially resulting in no new projects being released for three to five years and, under the most restrictive scenarios, suspension of some projects already underway. Projects supporting extensions of water and wastewater infrastructure to new development would be among the first affected. This would have a direct and significant impact on the pace and cost of future development throughout El Paso.
As the PSB considers the upcoming budget and rate structure, it will be important for members of the development and business community to make their voices heard and communicate that continued investment in water and wastewater infrastructure is essential to accommodate growth, maintain system reliability, and support El Paso’s long-term economic development.
On Sept. 1, 2026, a temporary exception in the National Electrical Code (NEC) is scheduled to expire. For builders, HVAC contractors, electricians, code officials and manufacturers, that date could have significant consequences, particularly in states and local jurisdictions that continue to enforce NEC Section 210.8(F), which requires ground-fault circuit interrupter (GFCI) protection for outdoor HVAC equipment.
The issue is not simply whether GFCI protection is a good idea, but rather if the industry has a reliable, widely available, cost-effective and field-proven solution before the exception expires.
What Is Changing?
Section 210.8(F) was added to the 2020 edition of the NEC and requires GFCI protection for outdoor outlets supplied by residential branch circuits. Because the NEC defines an "outlet" as any point where current is taken to supply equipment, the requirement applies not only to receptacles but also to hard-wired outdoor equipment such as air conditioners and heat pumps.
Following reports of nuisance tripping and compatibility concerns involving HVAC equipment, the National Fire Protection Association (NFPA) approved a temporary exception that exempted listed HVAC equipment from the requirement until Sept. 1. That exception was carried forward into later editions of the NEC.
The 2026 NEC also added an alternative pathway using Class C special-purpose GFCI protection (SPGFCI) for qualifying HVAC equipment.
Impact on Builders
The exception is expiring while several questions on product availability, nuisance tripping and cost remain unresolved
One of the industry's primary concerns is whether compliant products will be available in sufficient quantities.
Recent discussions among builders, contractors and manufacturers indicate that some residential Class C SPGFCI products are not yet widely available. Industry participants have reported that certain manufacturers expect residential Class C products to become available only after the deadline passes, while newer high frequency (HF) rated GFCIs designed to work with modern appliances are only now entering the market.
Even if products are technically available, availability at scale is a different question. Builders need products that can be purchased, installed and supported nationwide.
NAHB has been raising concerns about GFCI compatibility since Section 210.8(F) was first introduced. Modern HVAC systems increasingly incorporate variable-speed compressors, inverters and other electronic controls. And a nuisance trip on an air conditioner during a heat wave could leave vulnerable occupants without cooling until the breaker is reset, and in large areas of the southern U.S., the breaker panel is located on the outside of the home.
Builders and contractors are also watching for potential cost implications.
Some stakeholders have expressed concern that if limited products are available when the exception expires, builders may be forced to use more expensive solutions that have not yet seen widespread residential use.
Many States Have Already Acted
A growing number of states and jurisdictions have concluded that modifications to Section 210.8(F) are necessary.
According to recent NAHB tracking, at least 19 states have amended, delayed or limited the requirement in some manner. An additional eight states are currently on editions of the code prior to 2020, which do not include Section 210.8(F).
As a result, many builders across the country will not be affected by the Sept. 1 deadline. The greatest concerns exist in states and local jurisdictions that are enforcing Section 210.8(F) without amendments exempting HVAC equipment.
Connect with local professionals. HBAs can meet with local electrical inspectors to determine how they plan to handle the transition and any potential problems, such as lack of compliant breakers or instances of nuisance tripping.
HBAs can also contact electrical contractors and distributors to verify they will have enough breakers available.
Pursue regulatory updates. Although time is short, HBAs may pursue a state or local amendment exempting listed HVAC equipment or extending the current exception. This approach has already been used successfully in multiple states and jurisdictions. It allows additional time for products to mature and demonstrate field performance.
Where formal amendments are difficult to obtain, building departments may be able to establish temporary enforcement policies, interpretations or variance procedures.
Several jurisdictions previously used administrative processes that allowed replacement of nuisance-tripping devices when operational problems occurred. While not ideal, these approaches can provide flexibility during the transition period.
The expiration of the HVAC exception in NEC 210.8(F) is coming up quickly. For jurisdictions where the requirement remains unchanged, HBAs should verify that electrical contractors and inspectors are ready and may want to pursue a code amendment or policy change to address potential problems.
