New home sales have been mostly sideways at a weak level, in a choppy fashion. 
The New Home Sales Report for January 2025 shows a huge percentage decline in sales but the data is mostly sideways.
Key Sales Numbers
- New Home Sales: Sales of new single-family houses in January 2025 were at a seasonally adjusted annual rate of 657,000. This is 10.5 percent (±19.9 percent) below the revised December rate of 734,000 and is 1.1 percent (±15.3 percent) below the January 2024 estimate of 664,000.
- Sales Price: The median sales price of new houses sold in January 2025 was $446,300. The average sales price was $510,000.
- For Sale Inventory and Months’ Supply: The seasonally-adjusted estimate of new houses for sale at the end of January was 495,000. This represents a supply of 9.0 months at the current sales rate.
Note the huge margins of error in these reports, +- 19.9 percent. The 10.5 percent decline was based off an upward revision in December from 698,000 to 734,000.
Compared to the unrevised number, sales declined about 5.9 percent vs the reported 10.5 percent.
New Home Sales Annualized vs Homes for Sale Since 1963
New home sales are annualized. Home for sale are straight up. Both are seasonally adjusted.
New Home Sales vs Housing Starts
New home sales are single-family. Housing starts include multi-family.
New Homes for Sale Supply
This is a bogus number because it includes vacant land not even started.
New Home Sales vs Existing Home Sales
Note the scales. Existing-home sales dwarf new home sales.
But new home sales represent family formation, and there is much more that goes into building a new home than the typical remodeling that goes into existing homes.
Both sets of numbers have stabilized at low levels.
Demand will not pick up until mortgage rates and prices are both much lower.
Related Posts
February 19, 2025: Housing Starts Drop 9.8 Percent, Unable to Retain Any Traction
Housing starts have mostly been rangebound since late 2022 as high prices and high mortgage rates dampen demand.
February 21, 2025: Student Loan Borrowers Crushed by Appeals Court Ruling, Credit Scores Plunge
The courts are busy. This one goes against Biden. Economic repercussions are significant.
February 21, 2025: Existing-Home Sales Drop 4.9 Percent in January, More Than Expected
After three months of increases, sale took a big dive in January.
February 25, 2025: US Consumer Confidence Drops at Sharpest Pace in 3-1/2 Years
Consumers are concerned over inflation. Recession should be the bigger fear.
Lets not deceive people into thinking debasing the dollar to push down rates is a good thing. Artificially low rates are the root cause of this whole mess. Get the govt out of socialist mortgage subsidation and prices will fall. Higher mortgage rates are a good thing because they deter greedy speculation and hoarding by the wealthy.
The Republicans and Democrats are 100% to blame for the housing mess because they subsidized mortgage rates with money printing. They maintain the existence of the federal reserve by an act of congress. The fed currently has over 2 trillion in mortgage backed securities in holdings. Imagine if that massive amount of mortgage debt had to be bought my money that wasn’t printed (dollar debasement) by the Fed. The rates would have to go higher so that would get rid of a lot of greedy speculators hoarding housing using cheap debt, and housing prices wouid decrease so the people doing the real work maintaining this country could afford them. So think about that when you go to vote. If you vote R or D, you are saying yes, continue this unaffordable housing mess and keep letting greedy landlords leech off the decent laborers people. It’s astounding how bad of a job the fed board of governers and congress have done with housing for the people theyre supposed to serve. They ask for our votes and then enact policy that harms us. Shame.
Local residents on Moorpark in Studio City, are upset that L.A. City council approved a new 5 story 120 unit low income apartment building without consulting those in the neighborhood community, particularly because there will be no onsite parking.
Would love to see because of a major real estate down turn all of the companies that have been buying up homes and turning them onto high priced rental properties,which are having the direct effect of ruining long established neighborhoods due to the fact that the new rental tenants don’t have strong monetary incentive to keep their the neighborhoods up to it’s former standards by not being actual home owners
Yes it has been a disaster for this country. Congress enabled the already wealthy to buy up even more housing and land by having the fed massively push down mortgage rates with money printing. They have defied the first words of the constitution ” promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity..”. They shouid either right these wrongs theyve done or put in their resignation.
NAR, the National Association of Realtors, says, “Today is a great day to buy a house!!!” – please note they have said this daily for fifty years and may be slightly biased….
The “plunge” is barely noticeable in the data for the past couple years.
Tell that to those home owners in Florida
Big corporate builders (who dominate these days, since they have most of the land tied up), have inflated their sale prices by a lot the last couple years in order to offer below-market interest rates through their mortgage subsidiaries. As some of those recently-built homes re-sell, they put downward price pressure on new construction. Maybe some buyers are getting wise to the fact that they’re paying $750k for a $700k house in order to get that subsidized interest rate.
In the south cheaper houses are available in a flood zone, but insurance cost is $5,000/Y.
but its a great place to park a houseboat.
Mish, is the data adjusted for population growth? Probably not; it would make the impact of home sales much more impactful if you overlaid US population growth.
DOGE could reform the government, or it could just aggravate voters.Aggravate? I could think of a few other adjectives but its The American Conservative https://www.theamericanconservative.com/will-trumps-second-musk-bet-pay-off/
Doge is mostly just a bs charade continuing the Uniparty culture wars. If doge really wanted to do good, theyd educate the people on how Republican and Democrat Congress created all these problems by spending money we dont have. Congress has done vastly more damage than the people that lost their jobs.
What’s really interesting is *where* all the new home construction is. It’s not in the north east or older big metros.
It’s overwhelmingly in the south (Texas/Georgia/Florida/Carolinas etc) or the north west (Idaho).
https://www.nationalmortgagenews.com/list/20-states-with-the-most-new-construction-approvals
Some of this might be boomers moving south to retire in nicer weather/cheaper areas. But a fair bit must be reflecting the movement of businesses from Union (Blue) to Right to Work (Red) states.
It does suggest that if a bust happens in new home construction sales it’s going to be VERY regional.
Another link. Had to make a 2nd post because first one needs approval for multiple links (sigh)
https://constructioncoverage.com/research/cities-investing-most-in-new-housing
From what I keep reading, people are abandoning Florida because of the insurance rates issues. Texas isn’t far behind the insurance and property tax problem as well. It will be interesting to see how the next 10 years unfolds in housing.
I agree, there will be huge winners and huge losers.
What’s really interesting is *where* all the new home construction is. It’s not in the north east or older big metros.
It’s overwhelmingly in the south (Texas/Georgia/Florida/Carolinas etc) or the north west (Idaho).
https://www.nationalmortgagenews.com/list/20-states-with-the-most-new-construction-approvals
https://constructioncoverage.com/research/cities-investing-most-in-new-housing
Some of this might be boomers moving south to retire in nicer weather/cheaper areas. But a fair bit must be reflecting the movement of businesses from Union (Blue) to Right to Work (Red) states.
It does suggest that if a bust happens in new home construction sales it’s going to be VERY regional.
TNX popped in a huge speed between 2020 low at 0.4% and 2023 to 5%. It hit resistance. Since Oct 2023 it failed to breach 5%. It needs a correction – possibly to Aug/Sep 2022 gap: 3.1%/3.8% – before moving up in a sling shot to the 9%/8% area. JP might cut rates and stay the course to ease gov deb payments and jump start the frozen housing market. The spread between the mortgage rates, Fed rates and the CPI will be large ==> negative mortgage rates might tempt buyers. SPX might test the 4,600/4,800 area sometimes this year.
You’d have to be insane to enter into a large financed capital purchase such as a house right before we get into a trade war and upcoming recession.
https://finance.yahoo.com/news/why-the-spring-selling-season-is-going-to-be-challenging-for-homebuilders-124054446.html
I will add that commercial real estate loans continue to move in the wrong “default” direction.
https://cred-iq.com/blog/2025/02/07/cred-iqs-overall-distress-rate-reaches-a-fifth-straight-record-high/
2025 is supposed to be the year $1 trillion needs to get refinanced or defaults loom, let’s see what magic tricks the banks pull this year.
They brought the challenging environment on themselves. They almost certainly lobbied for all the cheap debt and stimulus. Do they really think there isnt a bust after a boom or are they wanting more bad stimulus again.
<<<Note the huge margins of error in these reports, +- 19.9 percent>>>
I’m sorry but the margin of error makes this report absolutely meaningless. Pathetic. Is this the best the government can do???
DOGE, where you at?
The federal government (Census Bureau) sends out this statistical number every month for market analysts. New home sales are recorded locally. So the federal government does not have real-time data on these sales. If you don’t use the SALT tax deduction, the federal government may not even know if you own a home in real time on an annual basis.
If you don’t like this statistical reality, don’t look at these numbers. But you certainly should not complain.
But you do highlight an issue with bloggers like Mish posting this is a “huge percentage decline in sales” for the the month of January. The Explanatory Notes of the report he linked to (thanks) specifically says that if the 90% confidence interval includes 0, “the change is not statistically significant; that is, it is uncertain whether there was an increase or decrease” and that “It takes 3 months to establish a trend for new houses sold” which thus should be how the data is analyzed.
That’s a bunch of crap. NVDA reported sales of 39.3 billion. Imagine they said actual revenue could have been as low as 31.5 million or as high as 47 billion. If NVDA can do it so can our government.
These numbers can be should be accurate from the get go. That’s why we need a DODE mentality to ensure timely and accurate government reporting.
NVDA is a private company that has to report its own earnings and profits to its owners/shareholders and to the IRS for tax purposes. It records its own sales within its own accounting software so of course, it knows the exact amount.
The Census Bureau is reporting statistical estimates of private sales of local homes to private individuals that do not have to report them to the federal government (as explained above).
The fact that you don’t see the difference, and think DOGE will magically make statistical estimates better says a lot
I’m referring to a DOGE mentality vs a government mentality. Government says it’s always been this way so there is nothing we can do to fix it. DOGE says the data is there so let figure out how to collect it and report it real time.
It can be done if you have a DOGE mindset.
NVDA is a public company and must adhere to public (government) standards. So why shouldn’t we hold the government to the same standard that they impose on the public?
Doge is the department of government elusion. The people who are the vast amount at fault, Congress, all still have their jobs.
I expect QE.
Because natural market forces will not promote house sales.
And Trump can’t have that.
This is why the Tariffs.
QE is not a mechanism that produces anything but inflation.
Keeping jobs and creating jobs in the US is only path forward.
To raise buying power, middle class must be rebuilt.
Lowering energy costs combined with a decent jobs market will recreate a growing economy.
“to raise buying power”?
I already have a job and most Americans wanting one already have one, too (thus the low 4.0% unemployment rate).
Tariffs will raise the (foreign and domestic) prices for all of us, thus reducing buying power. Sure, a few jobs may be created here, but they will certainly come at the expense of tariff inflation for the rest of us. Tariffs are no different than a lot of government interventions (a few big winners, and a lot of losers with losses spread out)
If things are so wonderful why are there so few people able to start families or own a Home?
50 % of People have trouble affording food, rent and transportation.
Maybe I am missing something but the Bulk of Mish articles address affordability.
Agree that its those who carried out QE (money printing and rate repression) that are at fault and people should acknowledge the Republicans and Trump are very much to blame along with the Democrats, no surprise. They passed the CARES act which was done through 2.2 trillion of QE. Thats over two thousand billions for those unfamiliar. The Libertarians are the only ones who strongly advocate a balanced budget and oppose QE, so if people really want to fix things we cant keep being fooled by the major parties.
What we need is an Elon Musk-type revision of how all this data is collected and collated because the error bars are horrendous. Maybe Big Balls will be free soon to look into it. I would love to have him let lose to ravage through the data.
Yeah. Sick Big Balls on em. This reporting is a joke.
That’s because it is produced on a Pentium processor PC, old but trusty.
Another business running off of Pentium processor is Costco, which causes me no amount of grief.
Pentium is the core of all modern intel cpus, they just put more cores inside the cpu. a Pentium had a single core. Modern cpus are just mulitple core pentiums with additional cache and interfacing between cores.
its all been incremental steps since the 8088, 8 bit, 16 bit, 32 bit, 64 bit cpus, when they reached the point that they could no longer get meaningful computing gains by raising clock speeds, due to heat and instability issues, they capped the speeds and started adding multiple cpus on the same die.
if something works, it is rarely discarded, unless you are the government. check out the surplus sales sometimes…
Excellent! Great reporting, Mish!
Looking forward to a future sales decline of 15% and then hopefully at least 20%. Either rates stay above 6% for a long time or we get a recession. Those are the only two ways prices drop anywhere near they need to.
Finding ourselves in 12 months or so to a WAY over built multi-family that supported all of the deported illegal aliens will certainly help.
My dream is to own a nation full of houses that nobody can afford to live in. Help me make it come true.
You sound like Yogi Berra.
I like that… I think I will start calling Reek “Boo Boo.”
are you wanting to become supreme chairman of China?
“Demand will not pick up until mortgage rates and prices are both much lower.”
What about population/demand for housing?
Reducing the flow of immigration reduces demand. I am wondering if and when this turns up in the price of rent. It will also impact home prices, but they really need to fall 40 percent. Not likely unless a very hard recession.
How about everyone losing their jobs?
Won’t that help sales…eventually…
When they attempt to downsize and cash out the difference?
They were getting rent paid for, by the unwitting Taxpayers, in many cases. The cost, as worked out in the corruption behind the scenes, also very much inflated in the cost of that Rent! This scam also prevented housing starts on Multi-Family Homes, which is what truly is needed. Unfortunately for those in need, they were/still are? one of the least profitable and take a much longer time to build. No quick turn, cookie cutter, ranches that will be flying out the door. Or McMansions with massive profits.
A lot of these are also bought by speculators and people looking for steady rental income. With rents dropping due to demand falling (illegals) and location has a lot to do with this sort of housing as well. They don’t want the condo style living, but a home environment with closer neighbors than what they would prefer, is just fine for now. A stepping stone of sorts.
the blackrock owned home, across the street from me, is still vacant. It will be a year empty in May.
Good neighborhood, close to University,freeways, shopping, trails, etc.
They have had maintenance crews out at least 4 times to trim trees, repaint etc. still it sits empty.
Blackrock is manipulating the rental market is my conclusion..
Well, removing 10 million people needing a place to stay should reflect in rents… (for example, not that Trump can actually do it)
I would also add as a variable restricting corp investments to rent residential housing. This should be banned outright. I have seen petitions starting around claiming such purchases (Berkshire is huge out here) should be ruled as violating local housing ordinances. Hope it’s enforced.