Comment # 5 on bug 943176 from Bernhard Wiedemann

I just read man useradd more closely and found
       UMASK (number)
           useradd and newusers use this mask
           to set the mode of the home directory they create

and indeed it does exactly that

(In reply to Daniel Pecka from comment #0)
> useradd -K UMASK=0077 -m -g secret-agents some_username
> 
> # ls -la /home/secret/
> total 52
> drwx------ 7 secret secret-agents 4096 Aug 26 01:25 .

so the umask is applied to the home dir, but not the skel files within
which conforms to the docs, but maybe not to expectations.