New Home Sales Slump Amid Elevated Mortgage Rates, Severe Weather
Housing activity for new residential construction started the year lower as high mortgages pushed buyers to the sidelines. New home sales plunged to start 2025 as high mortgage rates, record prices, and cold weather pushed potential buyers to the sidelines. Sales of new homes slumped 10.5% in January to a seasonally adjusted rate of 657,000 units, down from December's revised rate of 734,000.
- As homebuyers become increasingly priced out by soaring mortgage rates and record prices, builders are forced to get creative with their offerings, highlighting the delicate balance between affordability and profit margins.
- Will the prolonged period of high mortgage rates permanently alter the dynamics of the housing market, leaving a lasting impact on consumer behavior and builder strategies?