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ew home sales declined 8.2% in July compared to the same period last year, despite builders offering more incentives than usual. However, homes priced under $300k are selling quickly, making up 17% of total sales in July. This trend is pulling down the median price to its lowest level since November.

    The seasonally adjusted annual sales rate for new homes dropped to 652,000, with sales also decreasing by 0.6% from June. Builders have a large inventory of homes available, but incentives such as mortgage rate buydowns and upgrades aren't spurring transactions. According to the National Association of Home Builders' index, two-thirds of builders offered sales incentives in August.

    The supply of new homes has increased to 9.2 months, up from 7.9 months a year ago. This, combined with rising existing home inventory, will put downward pressure on housing construction starts in the coming months. New homes at lower price points are selling well, with houses priced under $300k accounting for a larger share of sales.

    The recent decline in mortgage rates may boost buyer activity in August, but the July peak of the homebuying season was muted. The 30-year fixed-rate mortgage fell to 6.52% after Federal Reserve Chairman Jerome Powell hinted at interest rate cuts, before rising slightly to 6.54%.