Political Calculations' initial estimate of the total valuation of U.S. new home sales in July 2025 is $29.68 billion.
This estimate is up about one percent from Political Calculations' initial estimate of $29.37 billion for June 2025. That month's estimate however has been revised upward to $29.41 billion this month. The initial estimate for July 2025 is 0.9% above this revised level.
These figures are time-shifted, partial trailing twelve month averages. The initial estimate for any given month is based on the U.S. Census Bureau's estimated annualized number of new home sales multiplied by their average price for that month, which is averaged with the data for the preceding six months. These total valuation (or new home market capitalization) estimates are then updated as each new month's data is added to it, until it covers a full twelve months worth of data, and as older data is revised, which continues until that data is finalized some 10 months after the month for which the data applies.
The benefit of this approach is that it 'centers' the trailing average in something closer to real time, which makes it easier to tell when changes in trend take place. The following charts present the U.S. new home market capitalization, the number of new home sales, and their sale prices as measured by their time-shifted, trailing twelve month averages from January 1976 through July 2025. The data through July 2025 indicates the new home market cap is rising mainly due to average sale prices being elevated in recent months even as the number of sales has trended downward during this period.
New home sales in downward trend:
Flat trend for prices at elevated level:
Reuters reports the number of new homes sold in July 2025 fell after the previous month's sales numbers were revised sharply upward:
Sales of new U.S. single-family homes fell in July following a sharp upward revision to the prior month's sales pace, and the overall trend remained consistent with a housing market struggling in an environment of high mortgage rates.
The report from the Commerce Department on Monday bolstered economists' expectations that the housing market slump could persist through the end of the year. Though mortgage rates have eased on expectations that the Federal Reserve would resume cutting interest rates in September, they continue to outpace wage growth, pushing home ownership beyond the reach of many.
That's not quite correct, as new home prices in recent months have been moving toward becoming affordable for the first time in more than three years. At this time, they remain out of reach for the typical American household, which we'll explore in more detail in a separate analysis in upcoming weeks.
References
U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 26 August 2025.
U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 26 August 2025.
Image credit: Microsoft Copilot Designer. Prompt: "A newly constructed two-story suburban house with beige siding and a dark gray gabled roof. The house features white trim, a large arched window on the second floor, a white double garage door, and a black front door with a small porch. The front yard has a neatly manicured green lawn with small shrubs near the foundation. A concrete driveway extends from the garage all the way to the street. In the foreground, a red and white "NEW HOME FOR SALE" sign is staked into the grass of the front yard, supported by a white wooden post. The sky is bright blue with scattered white clouds, and a line of trees is visible in the background." Note: This image went through multiple iterations. So many, in fact, we asked Copilot to write a prompt for generating the final result.
Labels: market cap, real estate
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