January new home sales fell to the slowest pace since 2022

Newly built home sales in January fell 17.6% month over month to a seasonally adjusted annual pace of 587,000 units, according to the U.S. Census Bureau. This is the slowest pace since 2022.

Housing analysts had expected a much smaller decline.

Sales are also down 11.3% from January 2025, according to the U.S. Census, which is still lagging in its reporting due to last year’s government shutdown. December sales were also revised down.

This number is based on signed contracts, so people were shopping when mortgage rates were lower than they are today. The average interest rate on a 30-year fixed loan ranged between 6% and 6.2% during January, according to Mortgage News Daily. It currently stands at 6.36%.

As a result, the inventory of homes for sale rose to a 9.7-month supply, compared to eight months in December, according to the U.S. Census. This is 7.8% higher than January 2025.

More supply and less demand led builders to reduce prices. The median price of a home sold in January was $400,500, a decline of 6.8% year over year, the agency said. Existing home prices remain flat nationally, but builders are reporting increased incentives to get buyers in the door.

The data from March doesn’t look better than ever. An estimated 37% of builders cut prices in March, up from 36% in February, according to the National Association of Home Builders.

Sales were lower across the country, but fell more in the Northeast and Midwest, where severe winter weather could have had an impact. However, sales were down nearly 22% from December in the West, where the weather played no role.