New Home Sales are the lowest since November of 2022.
The Bloomberg consensus was 728,000 vs actual 587,000. So, this was not expected.
The Census Bureau’s New Residential Construction Report for January 2026 shows a decline in sales of 17.6 percent.
This is the lowest new home sales since November of 2022.
New Home Sales
- Sales of new single-family houses in January 2026 were at a seasonally-adjusted annual rate of 587,000.
- This is 17.6 percent (±13.3 percent) below the December 2025 rate of 712,000, and is 11.3 percent (±15.6 percent) below the January 2025 rate of 662,000.
The margins of error in these reports are high. The Census Bureau does not have a lot of confidence in their numbers, and neither do I.
New Home Sales Long Term
For Sale Inventory and Months’ Supply
- The seasonally-adjusted estimate of new houses for sale at the end of January 2026 was 476,000. This is 0.4 percent (±1.2 percent) above the December 2025 estimate of 474,000, and is 4.0 percent (±5.1 percent) below the January 2025 estimate of 496,000.
- This represents a supply of 9.7 months at the current sales rate.
- The months’ supply is 21.3 percent (±18.2 percent) above the December 2025 estimate of 8.0 months, and is 7.8 percent (±21.3 percent) above the January 2025 estimate of 9.0 months.
Sales Price
- Sales Price The median sales price of new houses sold in January 2026 was $400,500. This is 4.5 percent (±8.0 percent) below the December 2025 price of $419,200, and is 6.8 percent (±8.4 percent) below the January 2025 price of $429,600.
- The average sales price of new houses sold in January 2026 was $499,500. This is 5.9 percent (±7.9 percent) below the December 2025 price of $530,900, and is 3.6 percent (±8.2 percent) below the January 2025 price of $518,200.
New Home Sales vs Existing Home Sales
Reflections on Affordability
Homes are not affordable.
Q: How do we know that?
A: New home sales are very weak. And existing-home sales are weak.
Existing-Home Sales vs Mortgage Rates
Falling mortgage rates did not do much for either existing-home sales or new home sales.
And mortgage rates are headed back up.
Mortgage News Daily reports an average 30-year fixed rate of 6.43 percent today, up from the low of 6.0 percent on February 27, 2026.
Trump’s Two Pledges on Housing
In case you missed it, please see my January 30, 2026 post: Dear Zoomers, Trump Says He “Wants to Drive Up Housing Prices”
Somehow, I doubt Gen Z will like this message.
The economic illiteracy of this president is stunning. He promises to keep home prices high and simultaneously make them more affordable.
Related Posts
March 10, 2026: Existing Home Sales Stagnant for Over Three Years Despite Falling Mortgage Rates
Home prices are still too unaffordable.
March 6, 2026: Nonfarm Payrolls Decline by 92,000 in February, Household Data Is Garbage
Last month the BLS reported employment rose was 164,520,000. This month the BLS says employment fell by 185,000 to 162,912,000.
Last month, employment was overstated by about 1.4 million +- more huge revisions.
It’s hard to buy a home when you don’t even have a job.
Wait till the March numbers come out. I picked up the local paper this morning and checked out the realty transactions page. HALF empty. I’ve never seen anything like it. Twelve towns, all with only a single transaction this week! The layout artist scattered the entries in a big white field of emptiness because this section takes an entire page and there was simply nothing to fill it!
I know this time of year is slow for realty but this is new, it really is.
Interest rates generally fell for 4 decades with the sinister assist by the fed, bottoming in 2002. Rates are probably biased up for decades as government prints more and more dollars to “pay” for what government cannot afford that will result in relatively more dollars chasing relatively fewer goods and services eroding the dollar’s purchasing power. When home loans are made, the lender will require a profit and compensation for the lost purchasing power via higher interest rate. While there will be variations, the general upward direction in rates will be putting pressure on home affordability for years to come
New Homebuyers Are Paying a Record ‘Entry Fee’ To Own a Home
https://www.realtor.com/news/trends/new-homebuyer-record-costs-housing-market-gap/?cid=psc_nyp_syndication_trends_new-homebuyer-record-costs-housing-market-gap
Despite all the government’s illegal/immoral interventions, buyers will win this blinking contest eventually. Because no one “has to” buy, but at some point many people will “have to” sell.
They’re gonna sweeten up those veteran loan programs, you watch.
1/8% lower rate for triple amputees.
I imagine that gainful employment will still be a basic requirement of even the “sweetest” subprime I mean VA loan programs, no?
There is an affordability problem for young buyers in many areas. Boomers are getting older and many want to downsize. There has to be price drops to have more qualified buyers. So the number of homes sold is dropping in many areas and it’s taking longer to sell. These specialists give a summary for housing in 2026……
https://www.youtube.com/watch?v=kPsOWsh7ybw
Can the “Boomers” downsize?
Moving is a $%&^…..
and the older you get, the harder it is….
and then there are all the “fees”, “lost goods/valuables”, etc… that come with just
about everything now…..
If is everything is about price, everyone will lose except a few chosen ones……
Can the “Boomers” downsize?
Great question, but a better one would be: Do Boomers want to downsize? In my circle, I would say the average Boomer wishes to die in their home. They have illusions of Old Homes that were such, where you were sent to die. They want no part of it, regardless how much it’s changed.
They also strongly wish to leave something to their Families. The new homes “assisted living” are great for all 3 stages, of care, but take most of, if not all the money that would have been left, and more too on occasions. A tough sell…
I agree with the affordability issue, and these homes are also competing with (free or close to free) Boomer homes passed down. They are also competing with People living with the Boomers as they await their demise. This is 2 large groups of people out of the housing market entirely.
Over asking is a thing of the past in modest neighborhoods I would guess. With people worried about there jobs too, it’s causing a further wait and see approach by additional potential buyers. Not a time to be a seller of homes and cars, as we already have too many, and they were overpriced back then.
Real estate is local. Connecticut, New Jersey, Wisconsin all seller’s markets that have had no letup in prices since 2020. Plenty of other places where prices are still going up substantially (mostly in the midwest & northeast) and they outweigh the areas of the country that seem to have a housing glut with prices falling.
This time it’s different. When the housing bubble crashed. New homes were still being built and put on the market. This time, builders started paring back listings before sales resumed their fall. It would be interesting to compare months of inventory for the housing bubble vs today, with units sold on the same chart.
Home building is such an important part of the economy that if/when the “smart and nimble” builders cut back, they’ll send the economy into recession by leaving tons of people without work (it’s not just the physical laborers). People love to say “the builders will simply stop building this time and problem solved”. OK, and what does a home builder who doesn’t build homes do to make profit? Pivot to selling girl scout cookies instead? One thing that may have been “perfectly” timed was the self-deportation of men back to Latin America – they might have been laid off anyway by the builders so it all kind of worked out? for now, anyway.
Avg new home prices in the ‘hood
(these prior tear downs that got replaced by McMansions on 1/3 acre)
2006 – $1,250,000 (right before the 2008 crash)
2013 – $1,000,000 (bottom of pricing after 2008 crash)
2020 – $1,475,000
2022 – $2,000,000 (Covid pop)
2024 – $2,225,000 (momentum)
2025 – $2,600,000 (the peak)
Today – $2,475,000 (no sales)
Used homes still selling, upper end ($2M+) with discount, lower ($1.2M and under) at premium to ask — tear downs going for $900,000, at 2013 bottom they were $400,000.
Takeaway: the buyers have shifted their price point and expectations — lower
The smart spec builders I know have all retired or gone into hiding, they all made millions between 2000 and 2025 assuming they survived 2008, some did not
At those prices, I hope it’s a pretty nice “hood”!
Used to be “nicer” during simpler times — traditional small town vibe, those McMansions are a blight…plus now comes the legally required high density housing on the outskirts to house the Section 8 dreamers — so you have the worst of both worlds as the existing “regular Americans” cash out and move elsewhere
I say more or less the same thing every time you post housing data, but, today, I’ll reframe it a bit.
We all know that from mid 2020 through early summer of 2022, home prices went up 50 percent. This was due to mortgage rates being in the low 3’s (and at one point, even below that!). This allowed buyers to pay more for homes than they otherwise would have and they did. So, the price of homes (be them “used” or new construction) shot up, because people buy homes based on payments, not on the overall price. But, now that rates are “normal”, the buyer simply can’t afford the kind of home they want (whatever their price point), because with “normal” rates (as we have now) AND elevated prices, they just can’t get what they want, so, they stay where they are (either renting or in their current home).
But, sellers are different. they DO pay attention to the actual selling price as opposed to payments. And they really don’t want to lower their price to the point of meeting the buyer where they are. Even though if they dropped their price a bit, they still would have a phenomenal return over the past 7 years and have more equity than they could have possibly imagined.
And, yes, if rates got back down below 5.5, many of them would take the hit and get out of their current home and mortgage, but, the real issue is that homes simply got temporarily overpriced with the temporary low mortgage rates of the covid era, and have shown a stubborn resistance to fall back down to “appropriate” prices that buyers are willing to pay at current rates.
In my area, home prices on a per square foot basis did not move a penny from summer of 2022 through late last year. So far, this year, it seems that the dam is starting to break and sellers are actually reducing prices. The average home sold in the last 3 months has sold for 12 percent less than the asking price, and inventory is still increasing.
This market dislocation due to the low rates during covid will probably last another two years (based on my local data) barring any further external shock (war inflation/recession anyone?). But, I do expect that home prices will actually fade lower before we get back to the “normal” amount of transactions that we had before the pandemic.
Prices will fade lower. There will be no crash. I like your explanation of the difference between seller and buyer on prices vs. payment.
Lower fast or lower slowly, it still amounts to a sea of negative equity out there at some point. That negative equity will deliver noticeable economic consequences at some point.
Negative equity? No way. Prices went up so fast when interest rates were around 3%(and lower) that owners are not going to give up all that positive equity. No seller will lower their price to help affordability. No seller with a 3%, or lower, interest rate is hurrying when they have to buy in a 6.4% interest market. Today, I see 3-5 years of virtually no change until inflation catches up with “positive equity”.
what is negative equity? Owing more than the house will sell for?
There are already tons of people in America who bought from 2022-2025 who can’t sell today due to being in a negative equity position. There is also “effective” negative equity meaning by the time you factor in the commissions and moving costs, you are underwater in reality, but not part of the statistics yet.
Not sure why the down votes, your assessment seems spot on.
Until and unless sellers are willing to cede at least SOME of their MASSIVE passive-income gains, why would their be movement? The stock market, an EXTREMELY liquid market, isn’t even accepting a significant haircut in the face of war, massive inflation, economic mailaise, housing market locked up..it’s no longer a good discounting mechanism…..why would a less liquid market like real estate move? The everything bubble is what it is because those asset holders that have benefitted are unwilling to accept lower prices and have no current need to do so. Even the exogent circumstance of the biggest own-goal in history, the Iran conflict, hasn’t shaken out the excess….YET.
I suspect that we’ll just be witnesses to our own lost decade or two as price levels just stagnate until time catches up to the price.
A lot of buying took place in 2020-2023 at elevated prices. Those who bought then who want to sell are not looking at a big profit. They may well be looking at a loss because they paid max prices.
Cape Coral, FL is ground-zero for the beginning of the housing bust. Obviously, getting whacked by a couple of hurricanes did not help matters.
https://www.msn.com/en-us/money/realestate/the-worst-housing-market-in-america-is-now-florida-s-cape-coral/ar-AA1HIOuv?cvid=7739689237a34572848f2e393c2925ae&apiversion=v2&noservercache=1&domshim=1&renderwebcomponents=1&wcseo=1&batchservertelemetry=1&noservertelemetry=1
What’s worse is that home builders are sitting on finished homes, not listed as completed, simply because an electrician has not come out to connect them to the power grid. How many of these exist is anyone’s guess, because the home builders manage active listings of new homes with a vice-like (forgive the pun) collusive grip.
Everywhere you look, it’s secrets and lies. Makes it impossible to make rational decisions.
I have numbers and charts.
Intend to do a post on this.
Really? Builders have carrying costs. Building rates are a little north of 8% so I’m skeptical.
Where I am at, builders can’t “sit” on a completed home. Winter would destroy your water pipes if you didn’t connect electric and keep it at least 50 degrees inside.
If the U.S. wants to remain a nation of homeowners, it has no choice but to start building condos again.
https://archive.ph/YU7mg#selection-615.0-615.104
Condos stink. Tinier houses on tinier lots is the best way forward. But it’s much harder to make a killing on those.
See, Trump promised to make housing more affordable!
Another win!
More winning!