New-Home Sales Drop in January, Census Bureau, HUD Report

(Image courtesy of Census Bureau; Breakout image courtesy of Curtis Adams/pexels.com)

New single-family homes in January sold at a seasonally adjusted annual rate of 657,000, according to estimates released Feb. 26 by the U.S. Census Bureau and Department of Housing and Urban Development.

That’s down 10.5% from the revised December rate of 734,000 and down 1.1% from the January 2024 estimated rate of 664,000.

The median sales price of a new house sold last month was $446,300, and 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. The share of new homes sold below $300,000 dipped slightly from 19% last month to 17% this month,” noted First American Deputy Chief Economist Odeta Kushi. “The good news for potential first-time home buyers is the share of new homes sold below $300,000 remains higher than last year’s level of 14%.”

The seasonally adjusted estimate of new homes for sale at the end of January was 495,000, which would translate to a supply of 9 months at the current sales rate.

“On the positive side, the new-home market has become less sensitive to changes in interest rates thanks to homebuilders’ ability to offer rate buydowns and other pricing incentives,” observed Kushi. “However, this is threatened by elevated financing costs. Incentive use may be declining as a sales strategy as elevated interest rates reduce the pool of eligible home buyers.”