Sales of new single-family homes reached a seasonally adjusted annual rate of 494,000 in January, down -9.2% from the revised rate of 544,000 in December 2015.
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Sales of new single-family homes in the US fell in January after climbing to a 10-month high.
But sales of previously owned homes are growing at a steady rate, increasing 0.4% in January from December, and rising 11% from a year earlier, the National Association of Realtors said Tuesday.
Though the new homes market appears to have cooled, with construction activity falling in January and home builder sentiment descending in February, housing in general remains supported by a tightening labour market, which is lifting wage growth and bolstering household formation.
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The South region reported more sales than the other three regions combined, with 290,000 houses sold during January. Sales were down 5.2 percent from a year ago.
Sales last month plunged 32.1% in the West and declined 5.9% in the Midwest. Demand is far outpacing supply, pushing prices ever higher and skewing builder activity toward higher-end projects. But builders have increasingly focused on the more affluent slivers of the market, while the decline in sales listings of existing homes indicate that many Americans may have lost interest in upgrading to a new property. However, the overall housing market recovery remains intact.
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The drop in new home sales is partially due to seasonal slowdown, but pricing growth, global economic turmoil, and plunging energy prices likely made a bigger impact on the confidence of prospective new home buyers, despite continued job growth and eased mortgage rates. Ground breakings fell 3.8 percent last month to a seasonally adjusted annual rate of 1.1 million homes, the Commerce Department said in a separate report. The trouble is that the current US population is nearly 12 percent greater, meaning that a genuine recovery in existing-home sales would require an annual rate of over 6 million.
