Blaine, Minnesota. New homes starting at half a million dollars in Lexington Waters are highly efficient homes and are managed by a homeowners association.
Michael Siluk | UCG | Universal Images Group | Getty Images
According to the U.S. Census Bureau, sales of newly built homes fell 17.6% in January compared to the previous month to a seasonally adjusted annual rate of 587,000 units. This is the slowest pace since 2022.
Real estate analysts had expected a significantly smaller decline.
Sales were also 11.3% lower than in January 2025, according to the U.S. Census, whose reporting is still delayed due to the government shutdown last year. December sales were also revised downward.
This count is based on signed contracts, meaning people who shopped when mortgage rates were lower than they are today. According to Mortgage News Daily, the average interest rate on the 30-year fixed loan was between 6% and 6.2% in January. It is currently at 6.36%.
As a result, the inventory of homes for sale rose to 9.7 months of inventory, compared to eight months in December, according to the U.S. Census. That is 7.8% more than in January 2025.
More supply and less demand led builders to lower prices. The median price of a home sold in January was $400,500, a decline of 6.8% from a year ago, according to the agency. Prices for existing homes are still stagnant across the country, but builders report increasing incentives to lure buyers to the door.
The March data doesn’t seem to be any better. An estimated 37% of home builders cut prices in March, up from 36% in February, according to the National Association of Home Builders.
Sales were lower nationwide, but fell most in the Northeast and Midwest, where harsh winter weather may have had an impact. However, sales in the West, where weather would not have been a factor, fell almost 22% compared to December.
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