New-home sales fell in Texas as interest rates sidelined buyers in February, according to the Texas New Home Sales Report from HomesUSA.

Across Texas’ four largest cities, new-home sales increased year over year, but decreased month over month.

In Houston, there were 2,029 new-home sales in February, up from 1,827 a year prior. However, there were 2,046 sales in January — slightly higher than last month.

Prices decreased annually: Houston’s average new-home price fell to $396,276, down from $402,706 in February 2024. Month over month, however, the average new-home price increased by about $1,000.

“Texas new-home sales softened last month largely due to high mortgage rates and economic uncertainty,” Ben Caballero, CEO of HomesUSA, said in a press release. “This is concerning because spring is the traditional start of the home sales season, but right now, the numbers are telling us to expect only a moderate bounce. This is confirmed by modest pending sales numbers that are forecasting weak sales the first half of 2025.”

Caballero added, “that could change if interest rates moderate.”