Sales of newly built single-family homes slumped more than 17% on a seasonally adjusted monthly basis in January, according to figures published Thursday by the U.S. Census Bureau and Department of Housing and Urban Development (HUD).

Slowing to an annual sales pace of 587,000 units, new-home sales were 11.3% lower over the year and down from an annual pace of roughly 712,000 units in December. The Mortgage Bankers Association had estimated new homes sold at an annual rate of 640,000 in January.

Existing-home sales volumes also experienced a steeper-than-expected drop in January, according to the National Association of Realtors, which reported a 4.4% annual decline in the resale sector. The trade group and various mortgage-related data firms have attributed the broader slowdown in January homebuying activity to severe winter weather.

Because closed sales contracts tend to reflect prior-month mortgage application activity, the roughly 3% monthly decline in purchase applications for newly built homes submitted in December foreshadowed soft new-home sales totals for the first month of 2026.

Single-family residential construction activity contracted broadly in 2025 as homebuyers faced persistent affordability barriers. An estimated 679,000 newly built homes were sold last year, a drop of about 1.1% from the 686,000 sold in 2024, government data released last month shows.

The Census Bureau and HUD reported Thursday that the inventory of new homes for sale at the end of January totaled roughly 476,000, about 0.4% higher than December but 4% lower than year-ago levels of about 496,000. This represents roughly 9.7 months of supply, which is 21% above December levels and 7.8% higher over the year.

The median sales price of new homes sold in January was $400,500, about 4.5% below the December median sales price of $419,200 and 6.8% below last January’s $429,600. The average new-home sales price in January, meanwhile, was $499,500, nearly 6% below the December price of $530,900 and 3.6% below the January 2025 average price of $518,200.

Though home builders reported declining sales sentiment in January and February, a popular index updated by the National Association of Home Builders and Wells Fargo on Tuesday revealed a slight uptick in builder optimism in March.