Blaine, Minnesota. New construction homes in Lexington Waters starting at $500,000 are high efficiency homes and come with HOA maintenance.
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New home sales in January fell 17.6% from the previous month to a seasonally adjusted annual rate of 587,000 units, according to the U.S. Census Bureau. This is the slowest pace since 2022.
Housing analysts had expected a sharp decline.
Sales are down 11.3% compared to January 2025, according to the U.S. Census, but reporting is still delayed due to last year’s government shutdown. Sales figures for December were also revised downward.
This number is based on signed contracts, so these are people who were shopping when mortgage rates were lower than they are now. The average interest rate on a 30-year fixed loan hovered between 6% and 6.2% during January, according to Mortgage News Daily. Currently it is 6.36%.
As a result, the inventory of homes for sale increased from 8 months in December to 9.7 months, according to the U.S. Census. This is 7.8% higher than in January 2025.
Increased supply and decreased demand caused builders to lower prices. The median price of homes sold in January was $400,500, down 6.8% from the same month last year, the agency said. Existing home prices remain flat nationwide, but builders report increasing incentives to attract buyers.
March data doesn’t look any better. An estimated 37% of builders cut prices in March, up from 36% in February, according to the National Association of Home Builders.
Sales declined across the U.S., but the declines were greatest in the Northeast and Midwest, where severe winter weather may have been an impact. However, sales in the West were not affected by the weather and sales were down nearly 22% compared to December.
