Sales of new homes in the United States picked up less than anticipated in January, while the median price also climbed, according to government data released on Monday.
New single-family home sales logged a seasonally adjusted annual rate of 661,000 last month, up 1.5 percent from December’s revised figure, the Commerce Department said.
This was also 1.8 percent above the level a year ago, but below the consensus forecast by Briefing.com at 690,000.
Meanwhile, the median sales price of new houses last month came in at $420,700, up from $413,100 in December.
The market for new properties has been bolstered by a lack of supply in the existing homes market, with homeowners discouraged from putting their houses up for sale given that they had earlier locked in lower mortgage rates.
“The drop in mortgage rates since last fall has triggered a modest recovery in demand that will lift both new and existing home sales, but the latter will remain constrained by lack of supply,” said analysts at Pantheon Macroeconomics, in a report.
But mortgage rates have since risen from December and January dips, suggesting that high rates will likely continue to weigh on sales growth.
While the monthly data can be volatile, economist Rubeela Farooqi of High Frequency Economics said “the selling pace improved to start the first quarter.”
She expects that the lack of existing properties on the market could bring new home sales further support in the coming months.
Although some analysts have flagged risks that winter storms could have hit January sales, Pantheon added in its report that the overall dent was likely small.
This was “in part because the Northeast and Midwest regions, which were hit hardest by the weather, together only account for around 15 percent of total new home sales,” it said.
