In February 2025, new home sales were recorded at 0.676 million, slightly below the estimated 0.679 million. The previous month’s sales were revised from 0.664 million to 0.657 million, indicating a month-on-month increase of 1.8%, a recovery from the prior decrease of 6.9%.
The median sale price for new homes was $414,500, down 1.5% from February 2024. Available homes for sale reached 0.500 million units, up from 0.496 million in January, with new home supply equivalent to 8.9 months at the current sales pace.
Regional Sales Performance
Regional sales showed varied performance: the Northeast fell by 21.4%, while the Midwest rose by 20.6%, the South gained 6.6%, and the West decreased by 13.6%. Mortgage rates declined from above 7% to 6.74% in February.
Historical data illustrates that the sales pace fluctuates between a high of 0.760 million and a low of 0.590 million. In contrast, existing home sales in February rose by 4.2% to 4.26 million, surpassing the expected figure of 3.95 million, with prices increasing by 3.8% year-on-year.
Despite advances in sales, challenges with affordability persist due to high home prices and ongoing mortgage rates. The market is adapting as buyers and sellers respond to the prevailing economic conditions.
February’s new home sales data came in below projections, a subtle undershoot that follows ongoing market adjustments. A revision to the prior month’s figures shows a slightly weaker baseline than initially thought, but there was still a modest rebound from January’s drop. Price movement points to some relief for buyers, though affordability concerns remain, especially when combined with borrowing costs.
Inventory continues to grow, albeit gradually. With available supply now covering nearly nine months at the current sales pace, the housing market is showing signs of a more balanced position. However, this does not signal a widespread shift just yet. The fact that mortgage rates edged down from the levels seen earlier this year may explain some of the increased activity, but current borrowing costs remain an obstacle for many.
Regional Market Trends
The divergence across regions reveals a mixed picture. The Midwest saw a sharp upturn, while the South also made gains. At the same time, the Northeast registered a decline that outpaced the West’s contraction. This unevenness is not unusual, but it does suggest that local conditions—not just broader economic trends—are playing a role in shaping demand.
A look at past data provides additional context, reinforcing that recent figures remain well within the typical range of new home sales. Meanwhile, resale transactions picked up strongly, outpacing expectations. That increase, paired with another uptick in prices for existing homes, signals that demand remains intact despite earlier concerns about affordability.
For those assessing the coming weeks, all eyes will be on how supply and demand continue to interact. The balance between inventory growth and sales pace will indicate whether this stabilisation continues or if further shifts emerge. The direction of mortgage rates will also be decisive, as even incremental moves can influence the affordability equation.
Affordability remains a sticking point. While new home prices have edged lower, and mortgage rates eased slightly, neither shift is transformative on its own. Consumers must still contend with borrowing costs that are elevated relative to previous years, which shapes both willingness and ability to purchase.
At this juncture, attention should remain on broader monetary policy signals, as well as any fresh data on employment and wages. Any influence on household finances could shift expectations, particularly with borrowing dynamics closely tied to rate movements. The latest updates on the housing market indicate some stabilisation, but there is no guarantee that current trends will hold in the near term.
