U.S. January New Home Sales - Weakness erases signs of improvement in trend
January new home sales have seen a sharp 17.6% decline to 587k, the weakest level since October 2022. Much of this weakness is probably due to weather, though other data from the housing sector suggests that signs of a pick-up in late 2025 have faded in early 2026.
Sales declined in all four regions though the steepest declines were in the Northeast and Midwest and these regions were hit by bad weather in late January.
Sales in November at 764k were the highest since February 2022 and the three month average, including the strong November and the weak January, at 688k is identical to that seen in September, suggesting that there remains little direction to trend despite the volatility.
Most housing indicators were showing signs of improvement in late 2025 as Fed easing resumed but have since lost momentum, though without collapsing. Housing is probably not going to be a major positive or negative for GDP in 2026.
The median price fell by 4.5% on the month, while the average fell by 5.9%. The monthly data is volatile and in part corrective from recent strength, though on a yr/yr basis the median at -6.8% from -0.9% yr/yr looks increasingly weak, while the average slipped to -3.6% from a positive 4.3% in December.
