A couple moving into their new home (https://propertysourceph.com)
WASHINGTON, United States — Sales of new US homes picked up less than anticipated in February, government data showed Tuesday, as analysts warned tariffs may weigh on the market in the upcoming months.
Sales of new homes came in at an annual rate of 676,000 last month, seasonally adjusted, the Department of Commerce said.
This was above January’s revised level of 664,000, but lower than a 680,000 reading expected by a Briefing.com consensus forecast.
“After being held down by bad weather in January, new home sales rose in February, but by a touch less than expected,” said Nancy Vanden Houten, lead US economist at Oxford Economics.
The median sales cost for new homes was $414,500, cooling slightly from January’s level, data showed.
READ: Market for newly built homes in US slows as mortgage rates put off buyers
High interest rate
Sales of new properties have been boosted in recent times as homeowners proved reluctant to enter the market for existing homes — given that interest rates remained elevated.
“The supply of new homes for sale continues to edge higher and rose to its highest since the global financial crisis in February,” Vanden Houten added in a note.
Builders may need to keep offering price cuts to clear inventories, she said, but “that may become more challenging if tariffs significantly raise building costs.”
Economists at Pantheon Macroeconomics warned in a recent report that sales are likely to shift lower this spring, as homebuilders would probably “raise prices for new units substantially in response to new tariffs.”
“NAHB members estimate that tariffs recently introduced on imported lumber, aluminum and steel will raise the cost of building a typical home by $9,200,” Pantheon said, referring to the National Association of Home Builders.
READ: U.S. existing home sales down 1.9%
Many homebuilders are likely hoping that US President Donald Trump will follow through on earlier pledges to open up federal government land for development and slash regulations, Pantheon noted.
“But before then, we expect new home sales to weaken,” it said.