ConDig (25-Mar-25)  New home sales in the US saw a modest uptick in February, driven by slightly lower mortgage rates and limited availability of existing homes, even as affordability concerns continue to weigh on the market.

Sales of newly built, single-family homes increased by 1.8% to a seasonally adjusted annual rate of 676,000 units, up from a revised January figure. This pace also represents a 5.1% increase compared to February last year, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“New home sales have been roughly flat thus far in 2025, as ongoing limited inventory of existing homes in many markets continues to support the need for new homes,” said Buddy Hughes, chairman of the National Association of Home Builders (NAHB).

“Although policy uncertainty may be holding back some home buyer and business decisions, builders have hope that regulatory reform and tax policy extension will act as tailwinds later this year.”

NAHB chief economist Robert Dietz added that while affordability concerns and external risks such as tariffs remain significant challenges, lower mortgage rates helped lift demand. 

“While new home inventory is at an otherwise elevated 8.9 months’ supply, total home supply—new and existing—is a relatively lean 4.2 months’ supply for February,” he said.

A new home sale is recorded when a sales contract is signed or a deposit is accepted, with the home potentially in any stage of construction. The 676,000-unit figure reflects the annualized rate if the current sales pace were sustained for 12 months.

New single-family home inventory in February rose to 500,000, reflecting a 7.5% increase from a year earlier and representing an 8.9-month supply at the current building pace. The number of completed, ready-to-occupy homes for sale climbed to 119,000, marking a 35% year-over-year increase and reaching the highest level since mid-2009.

The median sale price of new homes in February was $414,500, down 1.5% from the previous year. Sales growth was notably supported by an increase in transactions for homes priced between $300,000 and $400,000.

Regionally, new home sales showed mixed performance. On a year-to-date basis, sales rose by 12.4% in the South but declined by 6.7% in the West, 13.5% in the Midwest, and 50.8% in the Northeast.