US Homebuilding Situation

In February of 2025

Date: February 27th 2025

Time: 5:00pm

The Homebuilding Situation stands at 9.49. This is 90.51 points below the Average Situation for Homebuilders.

Sales

January Sales improved moderately to 56,00 units. 1,000 sales more than the monthly average over 53 years.

Inventory

Current new single family homes for sale remained at 496,000 units, with December 2024 receiving a revision downward from 496,00 to 489,000. This is 87% of the record number set in 2006. There are 227,000 Spec Homes for sale. 85% of the record set in January 2008 and the most available since July of 2008.

Price Direction

Price increased on a year over year change level by 3.7%. The Median Sale Price for a New Home was $446,300

Mortgage Rates

Mortgage rate increase by 3.6% month over month. January’s average 30yr Fixed Mortgage Rate was 6.9%

Additional Commentary:

Builders will need additional incentives and price cuts to move inventory fast enough to start clearing the inventory buildup. Margin compression will continue until the Situation improves. Builders who can and do build product at the lower price ranges between $250-335,000 have an opportunity to increase market share as this would serve the Median buyer income profile. The lowest Average home price of the ten largest builders is $376,000.

Additional charts this month show the record months of spec homes as well as record months of backlog for sale.

Additionally one chart compares the index to the spec home inventory.

The Method and Research for the index is available Here:

https://www.uspropertyservices.com/homebuilding-situation-index