New home sales dipped nearly 12% in February compared to last year, even as the national market held steady at an average level of performance for the second consecutive month, according to Zonda’s latest New Home Market Update.
Why It Matters: The pace of new home sales is becoming increasingly uneven across the country. Larger builders are doing better than smaller ones, and buyers looking for higher-priced homes are showing more resilience than entry-level shoppers. One of the unifying trends right now is builder incentives. More than half of to-be-built communities and nearly three-quarters of quick move-in (QMI) supply included incentives such as rate buydowns, closing cost assistance, or design credits.
“There are good days and bad days in today’s housing market,” says Ali Wolf, chief economist for Zonda and NewHomeSource. “Fluctuations in stock values, uncertainty about the labor market, and low housing affordability have consumers particularly concerned. For some, though, marriage and babies are a more powerful factor.”
By the Numbers
- 666,568 new homes sold in February (seasonally adjusted annualized rate), down 1.9% from January and 11.6% lower than last year.
- Home prices stayed largely flat year-over-year. Entry-level homes averaged around $329,229, move-up homes $520,228, and high-end properties $912,283.
- QMIs—homes likely to be ready within 90 days—remain 89.6% above 2019 levels and 17.5% higher than last year.
- Incentives (often 4% of local prices) are now an expectation among many buyers, either to add home features or offset financing concerns.
Buyers Still Showing Up
New home sales remain tempered by affordability challenges and economic uncertainty. But higher-end buyers continue to show up, and quick move-in inventories are keeping overall supply visible, especially when helped along by builder incentives.
