January new home sales plunged 17.6%

Summary of Key Points Core Viewpoint - New home sales in January experienced a significant decline, with a seasonally adjusted annualized rate of 587,000, falling short of the expected 719,000 and down 17.5% month-over-month and 11% year-over-year [1][2]. Group 1: Sales Data - January's new home sales were reported at 587,000, a substantial decrease from the previous month's 745,000 [1]. - The inventory of new homes increased to a 9.7-month supply from 7.6 months, indicating a growing oversupply in the market [1]. - The average home price in January was $400,500, reflecting a 4% decrease year-over-year [1]. Group 2: Mortgage Rates and Market Conditions - Mortgage rates during January were in the range of 6% to 6.2%, which were lower than current rates, suggesting that the drop in sales was not primarily due to mortgage rate issues [2]. - The ongoing conflict with Iran has contributed to rising mortgage rates, impacting buyer sentiment and market activity [2]. - Preliminary data for February indicates that mortgage applications for new homes are less than 1% higher, suggesting little improvement in sales expectations for the month [3].