“Builder sentiment has improved as interest rates have dropped and buyers have begun to return in increasing numbers,” said Kelly Mangold, principal at RCLCO Real Estate Consulting. “As fears of a significant recession lessen, buyers who have been sidelined for the past year or more feel more confident about making a purchase.”
Read more: Is the plus-5% mortgage rate environment here to stay?
January also marked the fifth consecutive month of decline in the median sales price of new homes, which fell to $420,700, even as the number of homes for sale increased to the highest level in over a year at 456,000.
NerdWallet mortgage expert Holden Lewis commented: “Sales of newly built houses rose modestly in January as builders applied their energies to both ends of the market — the inexpensive and the expensive. Some 15% of new homes sold for less than $300,000, compared to 11% in January 2023. Meanwhile, 14% of new homes were sold for $750,000 or more, up from 12% a year earlier.”
Lewis also mentioned the growing inventory of unsold new homes, hinting that builders might ramp up incentives to sell these properties.
