Economic Buzz: US new home sales slump sharply in January as housing market cools

U.S. new single-family home sales fell sharply in January 2026, dropping 17.6% from the previous month to an annual rate of 587,000 units, according to the U.S. Census Bureau. This was well below market expectations and marked the third monthly decline in the past four months, as well as the lowest level since October 2022. Despite the drop, sales remained above the lows seen in mid-2022.

The decline came even as borrowing costs eased, with the average 30-year fixed mortgage rate falling to 6.11%, its lowest level since September 2022, based on data from Freddie Mac.

Sales weakened across all regions. The Northeast and Midwest saw the steepest declines, while the South?still the largest market?also recorded a noticeable fall. The West posted its first monthly drop in several months.

Home prices also softened. The median price fell to $400,500, while the average price dropped to $499,500, both declining from December levels.

Meanwhile, housing supply increased slightly, with more unsold homes entering the market. The months? supply rose to 9.7 months, the highest since late 2022, indicating slower demand. Homes are also taking longer to sell, reflecting a cooling housing market overall.

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