ARLINGTON, Va.—New home sales decreased 7.8% in January – representing a 1% decrease from sales a year ago.
NAFCU Research Assistant Yun Cohen said sales in the South region, which experienced rare snowstorms during the month, accounted for most of the decline.
According to data released by the Census Bureau, sales also tumbled in the Northeast region, "which has the highest average home price and is more affected by rising borrowing costs and new limits on tax deductions," Cohen said in a NAFCU Macro Data Flash report.
However, sales in the Midwest increased 15.4% during the month and 1% in the West.
"Despite the disappointing start of the spring selling season, a survey by the National Association of Home Builders indicates that builders' confidence in future sales expectations reached a post-recession high in February," Cohen added. "Demand for housing is expected to remain strong in light of a healthy economy and strong labor market."
Based on current month sales, there were 6.1 months of supply in January, the most since July 2014 and up from 5.5 months in December. The number of unsold homes left on the market rose from 294,000 to 301,000 units, which represents a 15.3% increase from a year ago, Cohen said.
The median new home price, non-seasonally adjusted, decreased from $336,700 in December to $323,000 in January. The month's prices were 2.5% higher than a year ago, Cohen noted.