New home sales bounce back in January

New home sales bounced back in January from a slow December and have come in around their historical averages despite prices rising 10 percent over the last year, according to the latest report from Las Vegas-based Home Builders Research.

For 2025, Home Builders Research President Andrew Smith said that the share of new home sales versus existing home sales should be strong given more products less than $400,000 are coming on the market.

New home net sales (new sales minus cancellations) in January 2025 totalled 974 was down 8 percent from January 2024’s 1,063 net sales. The good news is it was 54 percent higher than December’s 633.

“Despite so much talk about lack of affordability, higher interest rates and other real challenges facing homebuyers, builders have successfully kept their cancellation rates at very normal levels (10 percent to 15 percent per month) compared to what was seen in late 2022 (at 30 percent to 40 percent cancellations) when those rate increases began to hit the market,” Smith said.

Smith pointed out that the average 30-year fixed rate mortgage peaked in the middle of January at just over 7 percent, and have been decreasing.

The median new home closing price for single-family detached products was $555,792 in January, up 10 percent from January 2024, but down from last month’s all-time high, Smith said. For attached product types, the January new home median closing price was $386,990, 1.8 percent higher than January 2024.

In January, Smith said six new for-sale product lines opened bringing 282 lots into the market. Beazer Homes debuted two smaller 20 to 24 lots of detached projects, Sunterra in the east valley and Keystone in the southwest.

D.R. Horton opened Symmetry Manor at Cadence featuring detached homes on larger lots of 7,200 square feet as well as Portfino Hills, a townhome community with 91 homesites in North Las Vegas.

Richmond American Homes’ Cresta Rosa in Henderson and Maxwell Ridge from Toll Brothers (Storybook Homes) in the Southwest were also unveiled, Smith said.

D.R. Horton was January’s top-selling builder with 210 net sales. The top-selling community for January was D.R. Horton’s Canyon Trails in the southwest valley with 23. This 94-lot townhome community offers two floor plans, both under 1,500 square feet and priced under $375,000, Smith said.

Pulte Group’s Sun City Mesquite, which opened in 2007, was second with 22 net sales to start the year.

The January 2025 building permit total of 1,058 was 10 percent lower than January 2024. In order to improve on 2024’s permit total of 12,543, activity must remain at or above this level for most of the year, Smith said.

Last year started strong with permit totals between 1,000 and 1,350 from January through May, but fell to under 900 per month starting in August, Smith said.

Home Builders Research reported there were 777 new home closings in January 2025, down one from the 778 in January 2024.

The new home market share in terms of overall closing was 26 percent to start 2025, down from 28 percent average in 2024 but in line with 2023, Smith said. He said Southern Nevada should fall in the 27 percent to 30 percent range in 2025 despite higher resale inventory and an increase in higher density new home projects below $400,000.

There were 585 single-family detached closings in January, 2 percent more than a year ago. Attached products closed 192 units in January, 5 percent fewer than in January 2024, Smith said. Market share for attached new home products in January came in at 25 percent, Smith said.

According to Clark County data, 14.1 percent of new home closings in January were cash transactions, 4 percent lower than the previous month and the lowest figure since January 2023 when Smith said he began calculating this number. Of those that were financed, the average loan amount was $456,026, down slightly month-to-month. The largest loan for a new home closing in January was $2,603,771 by Logan Finance Corp. for a home in the SkyVu community at MacDonald Highlands in Henderson from Christopher Homes. SkyVu also had the second highest loan last month, Smith said.

Builders in January added nearly 200 acres of raw land to their portfolios, highlighted by just over 109 acres acquired by KB Home at Interstate 11 and Galleria Drive in Henderson. American Homes 4 Rent, Richmond American Homes, Taylor Morrison and Touchstone Living also added vacant land in January, Smith said.

What National Association of Home Builders says

At the International Builders Show held in Las Vegas, National Home Builders Association economist Eric Lynch said a recession is unlikely this year because of the strength in the labor market despite job growth slowing and GDP moderating.

Lynch said the best way to get inflation down is to build and add supply and reduce the cost of housing for people.

The NAHB is predicting mortgage rates of 6.5 percent at the end of 2025. A year ago, the NAHB had sub-6 percent interest rates in its forecast for 2025.

At the end of the fourth quarter, the home ownership rate was 65.7 percent, and millennials continue to pick up their homebuying, Lynch said. Home owners are 38 times wealthier than renters.

The NAHB predicts national housing starts will increase 0.5 percent in 2025 before increasing 4 percent in 2026. It was 6 percent in 2024.

“We see moving forward for the rest of the decade for single-family homebuilding is the demographics,” Lynch said. “The reason why is the millennial generation. We thought that millennials would be homeowners or want to be homeowners. That’s the case, and they’re coming into their peak-buying years. There’s momentum for single-family production to continue.”

Rising prices, however, continue to be a challenge for first-time homebuyers. That’s why in February 59 percent of builders surveyed nationwide said they are using incentives to attract buyers. That includes closing costs and rate buydowns.