The latest numbers, released jointly by the U.S Census Bureau and Housing and Urban Development, show sales of new single-family homes in January 2025 plunged to a seasonally adjusted annual rate of 657,000, down 10.5% from December 2024, which raked in 734,000 residential sales.
The findings also show a 1.1% decrease year-over-year from the 664,000 estimate of homes sold in January 2024.
This drop might be due to an increasingly small pool of eligible homebuyers, shared CoreLogic Chief Economist Dr. Selma Hepp.
“New home sales will continue to struggle with fewer homes coming to market due to tepid buying activity,” read Dr. Hepp’s statement. “Even though homebuilders continue to offer buyer incentives, high mortgage rates—mixed with continued price appreciation—keep the eligible pool of homebuyers restricted to higher income individuals.”
The production of single-family homes is on the rise, however slightly, according to a release by the National Association of Home Builders (NAHB).
“As positive—regulatory reform and tax cuts—and negative—tariffs and immigration—policy scenarios rise, single-family starts are set to inch up 0.2% this year to an annual rate of 1.01 million units and rise an additional 4% in 2026 to a 1.05 million pace,” read the release.
Affordability remains a challenge for homebuyers, said Danielle Hale, chief economist at Realtor.com in the NAHB release.
“The mortgage rate lock-in effect is gradually fading but affordability remains a challenge for home buyers,” Hale said. “New home sales are expected to outperform again in 2025 but competition will be growing from existing sellers,” said Hale.
This was reflected in price points, as the proportion of sales under $400,000 fell from 48% to 41% last month, while the percentage of homes sold for between $500,000 and $600,000 rose from 12% to 16%.
The median sales price of new houses sold in January was $446,300. The average sales price was $510,000.
At the end of the month, there was a seasonally adjusted estimate of 495,000 new homes on the market—a nine-month supply at the current sales rate.
Month-over-month, the Northeast showed a 20% decrease in home sales; the Midwest showed a 16.7% decrease. The South decreased by 14.8% and the West showed a 7.7% increase in home sales from December 2024.
Year-over-year, sales were down in the Northeast and Midwest by 48.1%, and 13.6%, respectively. The South increased by 6.8% and the West by 3.1%.
