US new home sales rise, but tariffs threaten growth

Sales of new homes in the United States increased in February, according to government data released on Tuesday. The annual rate for new home sales was 676,000, which is higher than January's figure of 664,000. However, this number fell short of the expected 680,000, leading to concerns among analysts. Nancy Vanden Houten, an economist at Oxford Economics, noted that while sales improved after a slow January due to bad weather, the increase was not as strong as hoped. The median price for new homes was reported at $414,500, slightly lower than the previous month. Recent trends show that many homeowners are hesitant to buy existing homes due to high interest rates. This has led to a rise in new home sales. The inventory of new homes for sale is now at its highest level since the global financial crisis in 2008. However, future sales may be affected by tariffs on imported materials like lumber, aluminum, and steel. These tariffs could increase the cost of building a new home by about $9,200, according to the National Association of Home Builders. Economists predict that homebuilders might raise prices for new homes in response to these tariffs, which could lead to a decline in sales this spring. Many builders are hoping for changes from the government to ease development regulations. But until then, experts expect a slowdown in new home sales.