New home sales declined in January, reflecting typical monthly volatility as well as weather-related disruptions. On a three-month moving average basis, sales remain broadly in line with a year ago, suggesting underlying demand conditions have been relatively stable despite the month-to-month fluctuations. Meanwhile, builders continue to rely on incentives to attract buyers and sustain demand. The January NAHB/Wells Fargo Housing Market Index showed that 64% of builders used sales incentives, marking the 12th consecutive month this share exceeded 60%.

Sales of newly built single-family homes fell 17.6% in January to a seasonally adjusted annual rate of 587,000 from a downwardly revised December reading, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is down 11.3% from a year earlier. On a three-month moving average basis, sales were 688,000, remaining broadly in line with the 685,000 pace seen a year ago.

A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the January reading of 587,000 units is the number of homes that would sell if this pace continued for the next 12 months.

New single-family home inventory rose to 476,000 units in January. This is 0.4% higher than the previous month, but 4.0% lower than a year earlier. At the current sales pace, months’ supply for new homes stood at 9.7, compared to 9.0 a year ago. The increase in inventory along with weaker sales partly reflects a temporary slowdown in the new home market, as weather disruptions limited transactions during the month, particularly in regions such as the Northeast, where sales declined sharply by 44.7%.

A year ago, there were 116,000 completed, ready-to-occupy homes available for sale (not seasonally adjusted). By the end of January 2026, that number increased 10.3% to 128,000. However, completed, ready-to-occupy inventory accounted for just 27% of total inventory, while homes under construction made up 51%. The remaining 22% of new homes for sale in January were homes that had not started construction when the sales contract was signed.

The median new home sale price declined 4.5% to $400,500, representing a 6.8% decrease from a year ago. In January, 19% of new homes were priced below $300,000, while 34% were priced above $500,000. The share of new homes priced below $300,000 has trended lower since October 2025, after reaching a recent peak of 23% in September 2025.

Regionally, on a year-to-date basis, new home sales are up 1.4% in the Midwest and 4.1% in the South. New home sales are down 8.3% in the Northeast and 3.5% in the West.