New Home Sales Increase Slightly in January

(Illustration courtesy of U.S. census Bureau/HUD)

Sales of new single‐family houses increased 1.5% from December and 1.8% year-over-year to a seasonally adjusted annual rate of 661,000 in January, the U.S. Census Bureau and the Department of Housing and Urban Development reported Monday.

The median sales price increased 1.8% month-over-month in January to $420,700, the report found.

First American Economist Ksenia Potapov noted prices have moderated from their peak of nearly $500,000 in October 2022, but remain significantly higher than pre-pandemic levels.

“The outlook for the new single-family home market is positive, but there are challenges,” Potapov said. “Potential home buyers are sensitive to mortgage rate fluctuations and long-term interest rates have risen again in recent weeks in response to stronger-than-expected economic data.”

Potapov said she still expects the Federal Reserve to cut interest rates later this year. “And with fundamental demand remaining strong, builders are optimistic for the future,” she said. “However, the significant boost in home sales activity typical for the spring home-buying season may be delayed later into the summer.”

HUD and Census reported the average sales price equaled $534,300 in January.