New home sales rose less than expected in the US last month, a so-so read on America’s tortured housing market showed.

The annual rate, at 676,000 undershot the 680,000 consensus. The 1.8% increase was around half the expected advance.

As the figure below reminds you, this series has gone basically nowhere in two years. This time in 2023, the annual sales rate was more or less where it is now.

It’s fair to call the rebound in February uninspired. January’s drop, you’re reminded, was blamed on bad weather. True to form, economists cited warmer temperatures and less snow for the tepid recovery. (Write your own jokes. Just know they’ve all been told before.)

Builder moods are abysmal right now. Recall that the latest read on NAHB sentiment was the second-worst since late 2023 despite the presence of a real estate developer in the Oval Office.

In sharp contrast to still-constrained resale supply, America has a veritable glut of new construction. Tuesday’s government released showed there were half a million new homes for sale late last month.

As the figure shows, that’s yet another “since 2007” high.

I say this every month, but to reiterate: Those empty homes have a carry cost. Sitting on them isn’t free. Builders need to sell them, and they’re having a hard time in that regard even considering the extent to which the shortage of used inventory makes new construction the only game in town. (Existing home sales actually posted a surprise gain for February in NAR data released last week.)

The median sales price for a new home in America last month was $414,500. The 30-year fixed is 6.75% or so. The median household income’s $80,000. You do the math. It doesn’t really work, which explains why so many people who desperately want to buy, don’t.

Shares of KB Home dropped sharply Tuesday after the builder slashed its full-year sales guide citing “affordability concerns and uncertainties related to macroeconomic and geopolitical issues, which are causing [Americans] to move slowly in their home-buying decisions.”

Meanwhile, the Case-Shiller update showed the 20-city gauge posted a 4.7% YoY gain in January. That was quicker than the 4.5% 12-month increase in the final weeks of 2024. (Remember: These figures are tallied on a two-month lag.) The national gauge rose 4.1%.

Note from the figure that the annual pace of price increases has accelerated for three straight reports.

Nicholas Godec, S&P Dow Jones’s head of FICC, said high mortgage rates “combined with already high home prices, pushed affordability to multi-decade lows in many regions” last year. “The current cycle reinforces the value of real estate as a long-duration asset, but also highlights how sensitive home prices are to changes in financing conditions and buyer affordability,” he went on.

In her latest, published Monday, Redfin’s Dana Anderson said homeownership rates for Gen Zers and Millennials have “flatlined.” Specifically, 26% and 55% of Gen Zers and Millennials owned their home last year, respectively, both unchanged from 2023.

“Before that, the Gen Z homeownership rate had increased each year since Gen Zers started aging into potential homeownership in 2017 (except 2022, when it stayed flat),” Anderson remarked, adding that “prior to 2024, the Millennial homeownership rate had increased each year since 2012.”