The first month of 2025 was much like the last months of 2024 for the new home market in the United States. With the estimated total valuation of all new homes sold during the month slowing grinding lower after hitting a minor peak in July 2024.

Then again, we can say the same thing about the preceding four years, all of which have fallen below the market capitalization peak the U.S. new home market reached in December 2020.

The initial estimate of the time-shifted, trailing twelve month average for the market cap of new homes sold in the U.S. is $27.20 billion, which is about 10% below December 2020's finalized market cap of $30.12 billion. Which is also to say the market for new homes in the U.S. is 10% smaller than it was at the end of 2020.

The following charts present the U.S. new home market capitalization, the number of new home sales, and their sale prices as measured by their time-shifted, trailing twelve month averages from January 1976 through January 2025.

"Flat" new home sales trend:

Stalling downtrend for home prices:

Perhaps the most significant factor affecting the number of new home sales are their prices. New home prices had been falling after peaking in September 2022, but through the end of 2024 and now in January 2025, that downward trend appears to be stalling with prices at an elevated level.

We'll take a closer look at the relative affordability of new homes in January 2025 sometime in the next week.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 26 February 2025. 

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 26 February 2025. 

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