Sales of new single-family homes in the United States dropped 10.5% from the previous month to a seasonally adjusted annualized rate of 657,000 in January 2025, falling short of market expectations of 680,000.
US new home sales fall more than expected
This decline marked the lowest level in three months, as persistently high mortgage rates continued to weigh on demand and affordability for prospective buyers. Elevated borrowing costs, coupled with ongoing economic uncertainties, have made home purchases less attractive despite a strong labor market and resilient consumer spending.
Sales declined across most parts of the country
Regionally, sales declined across most parts of the country, with the South experiencing a notable drop of 14.8% to 392,000 units, the Midwest falling 16.7% to 70,000 units, and the Northeast seeing the steepest decline at 20.0% to just 28,000 units. The West was the only region to defy the downward trend, posting a 7.7% increase to 167,000 units, possibly benefiting from stronger job growth and continued housing demand in key metropolitan areas.
Median sales price for new homes stood at $446,300
The median sales price for new homes stood at $446,300, reflecting ongoing cost pressures in the housing market, while the average sales price was $510,000. Elevated construction costs, supply chain constraints, and land shortages have kept prices relatively high despite the slowdown in sales. Meanwhile, the inventory of new homes for sale reached 494,000 units, representing a supply of 9.0 months at the current sales pace, indicating a growing buildup of unsold homes as demand softens.
