Sales of new single-family homes in the United States fell more than expected in January as persistently high mortgage rates continued to deterred buyers, adding to signs of an early-year slowdown in the housing market and broader economy.
According to joint estimates by the U.S. Census Bureau and the Deparment of Housing and Urban Development, new home sales dropped 10.5% to a seasonally adjusted annual rate of 657,000 units last month, below market expectations of 680,000 units.
The sharp decline was partly influenced by severe winter weather, which disrupted economic activity across much of the country.
Sales plunged 20.0% in the Northeast and 16.7% in the Midwest, where freezing temperatures likely discouraged home purchases. The South, which also experienced winter storms, saw a 14.8% decline. However, the West bucked the trend, rising 7.7% despite ongoing wildfires in California.
Meanwhile, the median new house price surged 3.7% from a year earlier to US$446,300, marking the highest level since October 2022.
Despite 100 basis points of Federal Reserve interest rate cuts since September, mortgage rates have remained elevated. The Fed paused further cuts in January as it evaluates the economic impact of the Trump administration’s policies, including tariffs, tax cuts, and mass deportations, which some economists view as inflationary.
