Sales of new single-family houses in the U.S. rose 1.8% month over month in February to a seasonally adjusted annual rate of 676,000, according to estimates from the U.S. Census Bureau and Department of Housing and Urban Development. On a year-over-year basis, it represents a 5.1% increase from the estimated 643,000 houses sold in February 2024.

“Lower mortgage rates helped to lift demand in February, despite other near-term risks such as tariff issues and affordability concerns,” Robert Dietz, chief economist of the National Association of Home Builders (NAHB), wrote in a statement.

The median sales price of new houses sold last month was $414,500, while the average price was $487,100. The seasonally adjusted estimate of new houses for sale at the end of February was 500,000, which represents an 8.9-month supply at the current sales rate.

Regionally, the Midwest had the biggest monthly gain with an estimated 76,000 new single-family house sales, a 20.6% increase from January. While the South had a modest 6.6% month-over-month sales increase, that region is up 19.0% since February of last year.

The Northeast has seen the biggest monthly and yearly declines. The estimated 22,000 new single-family houses sold in February marks a 21.4% drop from January and a 48.8% dip from last year.

Buddy Hughes, a homebuilder and developer who serves as chairman of the NAHB’s board of directors, said in a press release that he sees signs of optimism in the new home market.

“Although policy uncertainty may be holding back some homebuyer and business decisions, builders have hope that regulatory reform and tax policy extension will act as tailwinds later this year,” Hughes stated.