It appears overall economy activity at the start of 2025 is off to a sluggish start, and sales of new U.S. single-family homes are also lagging. In January, new-home sales fell more than expected due to a combination of factors including elevated home prices, continuingly high mortgage rates, and extremely cold weather in much of the nation, Reuters reports. The median home price in January was 3.7% higher than a year prior, rising to $446,300, the highest level since October 2022.
An increase in new-home inventory is also notable. Inventory of new homes rose by 1.4% (495,000 units) in January, a level not seen since December 2007. This is significant because higher inventory could make home builders reluctant to break ground on new housing projects.
New home sales plunged 10.5% to a seasonally adjusted annual rate of 657,000 units last month, the Commerce Department's Census Bureau said. The sales pace for December was revised higher to a rate of 734,000 units from the previously reported 698,000 units. Economists polled by Reuters had forecast new home sales, which make up about 15% of U.S. home sales, would slide to a rate of 680,000 units.
Sales tumbled 20.0% in the Northeast and plummeted 16.7% in the Midwest, likely chilled by frigid temperatures. They dropped 14.8% in the densely populated South, which also experienced winter storms, but increased 7.7% in the West despite wildfires in California. Read more
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