New Home Sales Improve, Reversing January Slump

New home sales reversed an early-year slowdown in February as winter weather let up and rates softened.

New home sales increased 1.8% on the month to a seasonally adjusted annual rate of 676,000, up from 664,000 the month prior, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development.

Sales performed better annually as well, up 5.1% from the February 2024 estimate of 643,000.

The increase was slightly lower than expected by economists surveyed by Bloomberg, who predicted a rate of 680,000.

Still, the data is a welcome shift from January’s slump when extreme winter weather tanked demand. Now, both buyers and sellers are cautiously returning to the market as inventory and mortgage rates improve. Existing home sales also rebounded.

Rates sank in February, reaching their lowest point so far in 2025. Though they began inching up again in early March, some borrowers locked in at a moment of improved affordability.

At the end of the month, 500,000 new homes were for sale. At the current rate, this represents an 8.9-month supply.

The median sales price of new houses sold was $414,500, while the average was $487,100.