January new home sales plunge to the lowest pace since 2022

Core Insights - Sales of newly built homes in January dropped 17.6% month over month to a seasonally adjusted annualized pace of 587,000 units, marking the slowest pace since 2022 [1] - Year-over-year sales were also down 11.3% compared to January 2025, with December sales revised lower [2] - The average rate on the 30-year fixed mortgage loan increased to 6.36% in January from a range of 6% to 6.2% [2] Inventory and Pricing - The inventory of homes for sale rose to a 9.7-month supply, up from eight months in December, representing a 7.8% increase compared to January 2025 [3] - The median price of homes sold in January was $400,500, reflecting a year-over-year decline of 6.8% [3] - Builders are offering increasing incentives to attract buyers as prices for existing homes remain flat nationally [3] Builder Activity - In March, approximately 37% of builders cut prices, an increase from 36% in February, indicating ongoing challenges in the market [4] - Sales were notably lower across the nation, with the Northeast and Midwest experiencing the most significant drops, potentially influenced by harsh winter weather [4] - In the West, sales fell nearly 22% from December, suggesting that weather conditions were not a contributing factor [4]