Washington – Sales of new single-family homes in the United States fell more than expected in January, reaching their lowest level in approximately three and a half years, likely due to harsh winter conditions.
The Commerce Department’s Census Bureau reported on Thursday that new home sales declined by 17.6%, recording a seasonally adjusted annual rate of 587,000 units, the lowest level since October 2022.
December’s figures were also revised downward, showing sales at 712,000 units instead of the previously reported 745,000. Economists had expected sales to drop to 720,000 units in January. Notably, all four major regions of the country experienced significant declines.
During January, snowstorms and extremely cold temperatures swept across most parts of the United States, making it difficult for potential buyers to go out and view properties, contributing to the sharp drop in sales.
Meanwhile, mortgage interest rates have been rising in recent weeks due to a more than 40% increase in oil prices. This has led to higher yields on U.S. Treasury bonds. Mortgage rates are typically influenced by changes in yields on 10-year U.S. Treasury bonds. This upward trend in interest rates could hinder any potential recovery in new home sales. At the same time, housing supply continues to increase.
Rising inventories of new homes, coupled with higher construction costs due to tariffs on imports and labor shortages resulting from stricter immigration policies, are putting additional pressure on single-family home construction. This is further compounded by a shortage of available land for development.
