- February new home sales rose 1.8% to 676K units, slightly below consensus.
- January sales were revised upward to 664K from 657K.
- Supply remains elevated at 8.9 months' worth of inventory.
A Modest Rebound in Challenging Market
New home sales in the US showed modest growth in February, climbing 1.8% to a seasonally adjusted annual rate of 676,000 units—just shy of the 677,000 consensus estimate. The slight uptick comes amid persistent headwinds from elevated mortgage rates and high home prices that have weighed on the housing market for months.
January's figures were revised upward to 664,000 from the initially reported 657,000, suggesting the market may be stabilizing after a prolonged slowdown. The supply of new homes stood at 8.9 months at the current sales pace, indicating inventory levels remain elevated compared to historical norms.
Persistent Market Pressures
The median sales price of new houses sold in February was $414,500, reflecting continued price pressures even as mortgage rates hover near 7%. "Buyers are cautiously returning, but affordability remains a significant barrier," said one housing analyst who asked not to be named while discussing preliminary data.
Builders have been offering incentives to attract buyers, including rate buydowns and price adjustments, but the market continues to face challenges. Housing starts declined 1.8% in recent months, reflecting builder caution amid uncertain demand.
Outlook Remains Cautious
With mortgage rates expected to remain elevated through much of 2025 and home prices projected to rise about 4% annually, analysts anticipate continued pressure on sales volumes. However, the slight improvement in February—coupled with January's upward revision—suggests the market may be finding a floor after months of declines.
Regional variations persist, with some Sun Belt markets seeing price corrections while other areas maintain steady growth. Industry watchers will be monitoring spring sales closely for signs of whether this modest rebound can gain momentum.