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Sales of newly built single-family homes declined during January, falling well below estimates, according to data released Wednesday by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD).
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Compared to December, new-home sales dropped 10.5 percent to a seasonally adjusted rate of 657,000, marking a 1.1 percent decrease from January 2024.
New Residential Sales | U.S. Census Bureau
“New-home sales started the year more like a lamb than a lion, declining 10.5 percent on a monthly basis to 657,000, well below the consensus estimate of 680,000,” First American Deputy Chief Economist Odesa Kushi said in a statement. “The only region to register a month-over-month increase in new-home sales was the West.”
As sales slowed down, housing inventory ramped up. At the end of January, the seasonally adjusted estimate of new houses on the market stood at 495,000, representing a nine-month supply.
Several factors may have contributed to homes staying on the market longer, including the threat of tariffs, high interest rates and elevated mortgage rates, and it’s not just homebuyers showing uncertainty — builders are also becoming more cautious.
Odeta Kushi | First American Deputy Chief Economist
“Builders’ growing pessimism is due to several factors. While builders benefit from a chronic housing shortage made worse by the ‘seller’s strike’ driven by higher mortgage rates, they still face lingering supply-side and affordability challenges,” Kushi noted. “Additionally, existing-home inventory has picked up, and as it expands, builders’ relative supply advantage wanes. The share of total inventory made up by new homes remains elevated compared to historic norms, but has leveled out in recent months.”
Despite the decline in newly-built home sales, home prices have continued to rise. The median sales price of new houses sold in January 2025 reached $446,300, while the average sales price was $510,000.
“The median sales price increased in January to the highest level since 2022, as more high-end homes were sold,” Kushi said. “The share of new homes sold below $300,000 dipped slightly from 19 percent last month to 17 percent this month. The good news for potential first-time homebuyers is the share of new homes sold below $300,000 remains higher than last year’s level of 14 percent.”
