Feb 24, 2025   SOURCE: PR NewsWire

New Home Market 'Fine' as it Slips to Average for First Time in a Year

The new home market had a muted start to 2025

NEWPORT BEACH, Calif., Feb. 24, 2025 /PRNewswire/ -- The New Home Market Update had a slow start to the year. New home sales totaled 649,967 on a seasonally adjusted annualized rate in January, down 11.3% year-over-year.

The Zonda Market Ranking, a measure of sales adjusted for supply, moved down from slightly overperforming to average. Meanwhile, quick move-in supply rose 18.9% compared to last year, providing consumers with more housing options.

"If there's one word to describe the new home market today, it would be 'fine,'" said Ali Wolf, chief economist at Zonda. "Traffic is low, and buyers lack any sense of urgency, but reasonable conversion rates show that serious buyers are still out and about."

The defining characteristic of today's housing market is its lack of uniformity. Our New Home Pending Sales Index demonstrates this, with some markets seeing 15%+ year-over-year growth, while others declined by the same margin. Variations in housing affordability, supply, labor market strength, and consumer confidence explain the locational differences.

    --  New home sales dropped year-over-year | There were 649,967 new homes
        sold in January (seasonally adjusted annualized rate). This was a 4.2%
        decline from last month and a drop of 11.3% from a year ago. On a
        non-seasonally adjusted basis, 53,956 homes were sold, 11.2% lower than
        last year and 4.4% below the same month in 2019.
    --  The PSI fell to lowest point since January 2023 | The New Home Pending
        Sales Index (PSI) came in at 125.3, representing a 11.3% decline from
        the same month last year. The index is currently 28.1% below cycle
        highs. On a month-over-month basis, seasonally adjusted new home sales
        decreased 5.9%.
    --  National ZMR shifted down to average | The Zonda Market Ranking (ZMR)
        index came in at 103.7 in January, indicating an average market. The
        National ZMR was slightly overperforming for all of 2024.
    --  Mixed pricing news | National home prices increased year-over-year for
        both move-up and high-end homes, up 0.3% to $520,729 and 1.2% to
        $918,703, respectively. Prices fell 0.5% for entry-level to $329,031.
        The entry-level declines represent a mix of select price drops, smaller
        home sizes, and differing locations.
    --  5.8% growth in community count year-over-year | There are currently
        15,672 actively selling communities (anywhere where five or more units
        are for sale), up 5.8% from last year. On a month-over-month basis, the
        national figure grew 0.5%. Total community count is 17.8% below the same
        month in 2019.
    --  National quick move-ins go up YOY | QMIs (can likely be occupied within
        90 days) totaled 33,976, up 18.9% compared to last year but 3.1% lower
        month-over-month. Total QMIs are 56.3% above 2019 levels.

See the full report including data and analysis. Visit NewHomeSource powered by Zonda for more on:

    --  How to Choose Between New Construction and Resale Homes
    --  Starter Home vs. Forever Home: For First-Time Buyers to Decide What's
        Best for Them
    --  New Construction Starter Homes May Be Answer for Millennials

Join us at an upcoming event (next: Seattle Dealmakers, Mar 19; Accelerate, Mar 24-25; Houston Dealmakers, Mar 28).

Visit ZondaHome.com or follow us on LinkedIn and Facebook for more information.

About Zonda

Zonda provides data-driven housing market solutions to the homebuilding industry. From builders to building product manufacturers, mortgage clients, and multifamily executives, we work hand-in-hand with our customers to streamline access to housing data to empower smarter decisions. As a leading brand in residential construction, our mission is to advance the home building industry, because we believe better homes mean better lives and stronger communities. Together, we are building the future of housing.

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SOURCE NewHomeSource powered by Zonda