Political Calculations' initial estimate of the total value of new home sales in the United States during January 2026 as measured by a time-shifted, partial twelve month trailing average is $27.37 billion, which is down substantially from December 2025's initial estimate of $30.36 billion.
The raw numbers for January 2026 are even worse. The U.S. Census Bureau's first estimate of the state of January 2026's new home market counted 48,000 non-seasonally adjusted sales at an average price of $499,500, which when multiplied together, rounds up to a total valuation of $23.98 billion.
The reason why isn't much of a surprise since January 2026 featured the largest and most severe winter storms in years. The northeast and midwest regions of the U.S. were very hard hit by the weather, which crashed new home sales in them. Here's how the National Association of Home Builders described the winter storms' impact on new home sales:
Sales of newly built single-family homes fell 17.6% in January, to a seasonally adjusted annual rate of 587,000 from a downwardly revised December reading, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is down 11.3% from a year earlier....
“New home sales fell in January largely because of weather-related disruptions, even as mortgage rates eased modestly,” said Jing Fu, NAHB senior director of forecasting and analysis.
Political Calculations' estimates are designed to capture the underlying trend in the new home sales. The initial estimate for any given month is based on the U.S. Census Bureau's estimated number of new home sales multiplied by their average price for that month, which is averaged with the data for the preceding six months. These total valuation (or new home market capitalization) estimates are then updated as each new month's data is added to it, until it covers a full twelve months worth of data and as older data is revised, which continues until that data is finalized some 10 months after the month for which the data applies.
The benefit of this approach is that it 'centers' the trailing average in something closer to real time, which makes it easier to identify when changes in trend take place. The disadvantage is that the most recent data is incomplete and will be subject to revision during the next nine months as new estimates are incorporated and older estimates are revised.
The following charts present the U.S. new home market capitalization, the number of new home sales, and their average sale prices as measured by their time-shifted, trailing twelve month averages from January 1976 through January 2026.
Flat-to-rising trend for new home sales:
Average new home prices trending higher:
The lack of new home sales is helping contribute to an increase in the supply of new homes. New homebuilders are responding to the situation by offering bigger incentives to new home buyers and lowering prices:
... the inventory of homes for sale rose to a 9.7-month supply, up from eight months in December, according to the U.S. Census. That is 7.8% higher than January 2025.
More supply and less demand led builders to drop prices. The median price of a home sold in January was $400,500, the agency said, a decline of 6.8% year over year. Prices for existing homes are still flat nationally, but builders report increasing incentives to get buyers in the door.
Data from March does not appear to be any better. An estimated 37% of builders cut prices in March, an increase from February’s 36%, according to the National Association of Home Builders.
This continuing weakness suggests the environment is shifting to become more of a buyer's market for new homes in the first quarter of 2026. We'll see how that progresses in the months ahead.
References
U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 19 March 2026.
U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 19 March 2026.
Image credit: House under construction photo by Ernie Journeys on Unsplash.
Labels: real estate
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