US New Home Sales Rise Slightly as Mortgage Rates Dip Slightly

Homebuyer interest is increasing, which could translate into sales if rates drop even more.

A “For Sale” in front of a home in San Anselmo, Calif., on March 22, 2023. Justin Sullivan/Getty Images

The sale of new homes across the United States rose last month on both a monthly and an annual basis, with cheaper home loans acting as an incentive for buyers.

“Sales of new single-family houses in February 2025 were at a seasonally adjusted annual rate of 676,000,” the U.S. Census Bureau said in a March 25 statement. “This is 1.8 percent above the revised January rate of 664,000 and is 5.1 percent above the February 2024 estimate of 643,000.”

The jump in new home sales can be attributed to “a slight decline in mortgage rates and limited existing inventory,” the National Association of Home Builders (NAHB) said in a March 25 statement.

The average weekly rate on a 30-year fixed-rate mortgage fell marginally in February, declining from 6.95 percent for the week ending Jan. 29 to 6.76 percent for the week ending Feb. 26.

By the end of February, there were 500,000 new homes for sale, up 7.5 percent from a year back. The inventory was worth 8.9 months of supply at the current pace of sales.

Buddy Hughes, chairman of NAHB, said that “new home sales have been roughly flat thus far in 2025, as ongoing limited inventory of existing homes in many markets continues to support the need for new homes.”

In a March 25 commentary, Lisa Sturtevant, chief economist at real estate data company Bright MLS, said the inventory of 500,000 new homes in February was “the highest new home inventory level since 2007.”

This buildup could indicate that buyers seeking to purchase new properties are “starting to pull back,” she noted. Sturtevant said the sale of new homes is expected to be lower this year for two reasons.

“First, the growing inventory of existing homes for sale has given buyers more options. When the existing home inventory was historically tight, some homebuyers had no choice but to look at new construction. Now, buyers have gained some leverage and have more listings to choose from,” she wrote.

“A second factor that is worth watching is the pace of new home construction. Right now, new home inventory is rising because there are fewer buyers and homes that were started last year are sitting vacant.”

Meanwhile, there are indications that interest among prospective buyers is rising, with the Homebuyer Demand Index—a measure of home tours and other buying services from real estate brokerage Redfin’s agents—registering a gain recently.

As of the week ending March 16, the index hit its “highest level in three months,” the company said. It was up 5 percent from a year back. Home tours are “rising faster this year than in 2024,” it noted.

Redfin suggested that this rising demand could translate into pending sales improving over the coming months, especially if mortgage rates were to drop further.

“Rates could decline if inflation eases and we see stronger evidence of weak economic data that point toward a recession,” the company said.

For the most recent week ending March 26, the 30-year mortgage rate ticked down after two straight weeks of increase.

Sam Khater, chief economist at Freddie Mac, said the “recent mortgage rate stability continues to benefit potential buyers this spring, as reflected in the uptick in purchase applications.”