New home sales were at a seasonally adjusted annual rate of about 494,000 units as of January – a decrease of 9.2% compared with the revised December rate of about 544,000 units and a decrease of 5.2% compared with the January 2015 rate of about 521,000 units, according to estimates released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Most of the decrease was due to a dramatic 32% drop in new home sales in the western states.
The median sales price of a new home sold in January was $278,800; the average sales price was $365,700.
As of the end of January, there were about 238,000 new homes for sale – a 5.8-month supply at the current sales rate.
Regionally, new home sales increased 3.4% in the Northeast and 1.8% in the South but decreased 32.1% in the West and 5.9% in the Midwest.
“After an unusually high December reading, some pullback [in new home sales] is to be expected,” says Ed Brady, chairman of the National Association of Home Builders (NAHB), in a statement. “On the positive side, builders are adding inventory in anticipation of future business.”
“Consumers are exhibiting caution in the face of some uncertain market conditions,” adds David Crowe, chief economist for NAHB. “The average of the December-January reports shows that housing is moving forward at a modest pace, buoyed by relatively low interest rates and ongoing job creation.”