Buyer traffic for new homes has fallen to its lowest level in 14 years, prompting builders to offer discounts and other incentives to keep sales moving.
Higher mortgage rates remain a major obstacle, pushing monthly payments beyond the reach of many prospective buyers.
Builders are responding with price reductions, mortgage-rate buydowns and upgrades designed to make purchases more affordable.
The slowdown is especially notable because new-home sales had remained relatively resilient while the supply of existing homes stayed tight.
Analysts say the pullback could force builders to scale back construction plans, particularly in markets where inventories are rising.
Still, the housing market is not facing a uniform downturn. Demand remains stronger in areas with job growth and limited housing supply, while affordability pressures are weighing more heavily elsewhere.
The latest trend suggests that even builders, who have benefited from the shortage of existing homes, are increasingly having to negotiate with buyers.