New home sales rose 1.8% in February 2025

New home sales in the United States saw a small increase in February, rising by 1.8% month-over-month. This comes after a significant drop of 6.9% in January, which was partly due to severe winter weather. Despite the February rebound, sales were lower than expected. Year-over-year, new home sales increased by 5.1%. However, the overall trend remains flat, with existing home sales continuing to decline. In the South, the largest homebuilding region, sales rose by 6.6% as buyers returned after the snowstorm. Sales also increased in the Midwest, according to new data from the Commerce Department. The supply of new homes for sale hit a high of 500,000, the largest amount seen since 2007. The median sale price of a new home has decreased by 1.5% from last year, now standing at $414,500. This shift in price could help some buyers. Builders are becoming more cautious, facing higher supply levels and rising mortgage rates. The current economic climate has made consumers hesitant, as they consider affordability and broader economic uncertainties. KB Home's CEO mentioned that these factors are causing buyers to delay their purchases. The company has also adjusted its revenue expectations after missing first-quarter sales goals.