New-home sales in the US fell at the start of the year to a three-month low, reflecting a combination of affordability challenges as well as harsh winter weather. Purchases of new single-family homes decreased 10.5% last month to a 657,000 annualized rate, according to government data issued Wednesday. That trailed the median estimate of economists surveyed by Bloomberg, who expected an annual rate of 680,000.
Sales declined by nearly 15% in the South, the biggest homebuilding region, where several areas experienced record snowfall in January. Sales in the Midwest and Northeast also dropped precipitously, while activity in the West picked up. The housing market remains hamstrung by elevated prices and borrowing costs, and builders who were initially optimistic about less regulation under President Donald Trump are now coming to terms with the reality of higher costs due to his planned tariffs. However, inventory that’s climbing slowly in the resale market should provide a floor for new home sales for the time being.
Source: Fortune