“Home builders are bloated with inventories, a growing share of which are completed units. We expect inventories and elevated mortgage rates to weigh on housing-market activity and home prices in the months ahead.”— Stuart Paul. To read the full note, click here

Entry-level builder DR Horton Inc. reported on its latest earnings call that it was offering heavy subsidies to bring down some customers’ mortgage rates to 3.99% as more buyers opt for loans backed by the Federal Housing Administration, which often accepts customers with lower credit scores.

More generally, overall housing demand may start to stabilize as potential homebuyers find a little more relief on financing costs. Mortgage rates in the week ended Aug. 15 were near the lowest level since April.

The government’s report showed the median sales price of a new home decreased nearly 6% in July from a year earlier to $403,800, the lowest for July since 2021. Prices have fallen on an annual basis every month this year except one.

For a fourth straight month, the median selling price of a new home was less than that of an existing property.