Check your ~/.gnuradio/config.conf file. In there is a section [modtool] and a "newmod_path=..."
Verify that matches the value of your installed path.
On mine it says:
[modtool]
newmod_path = /share/gnuradio/gr39/share/gnuradio/modtool/templates/gr-newmod
For 3.9, there was a slight change in the behavior how GR finds the newmod path:
in that it will look wherever the currently installed prefix is, which can be seen with
gnuradio-config-info --prefix
Make sure your environment variables are sourced correctly - PATH, PYTHONPATH, LD_LIBRARY_PATH, and LIBRARY_PATH