New home sales in the US drop 7.8% in January

Sales of newly built, single-family homes fell 7.8 per cent in January to a seasonally adjusted annual rate of 593,000 units after an upwardly revised December reading, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

"New home sales have taken a pause this month, but our builders are reporting confidence in the overall market and future sales conditions," said NAHB chairman Randy Noel, a custom home builder from LaPlace, La. "With strong consumer demand for housing, we expect the sales numbers to move forward in the months ahead."

"The moderation in new home sales may be attributable to the interest rate environment, which could be causing short-term market volatility," said NAHB senior economist Michael Neal. "However, the underlying economic fundamentals for housing demand remain strong and we expect more prospective home buyers to enter the market in 2018."

The inventory of new home sales for sale was 301,000 in January, which is a 6.1-month supply at the current sales pace. The median sales price of new houses sold was $323,000.

Regionally, new home sales rose 15.4 per cent in the Midwest and 1.0 per cent in the West. Sales decreased 14.2 per cent in the South and 33.3 per cent in the Northeast.