Sales of new homes fell on slightly in January as severe winter weather lashed most of the country.
The Commerce Department on Wednesday reported a 0.2 percent drop in sales for the first month of the year to a seasonally adjusted annual rate of 481,000 units from 482,000 homes in December.
{mosads}”The fact that January sales numbers maintained the gains we made in December is encouraging news, especially considering harsh weather affecting certain parts of the country,” said Tom Woods, chairman of the National Association of Home Builders (NAHB) and a home builder from Blue Springs, Mo.
Despite the drop, sales are still 5.3 percent above year-ago levels.
“In a promising sign, new home sales have been trending at post-recession highs for the past two months,” said David Crowe, NAHB chief economist.
“As the economy strengthens and mortgage rates remain low, we can expect continued upward movement in the housing market this year.”
The inventory of new homes stood at 218,000 in January, which is a 5.4-month supply at the current sales pace.
Regionally, sales rose 19.2 percent in the Midwest and 2.2 percent in the South.
But they fell by more than half — 51.6 percent — in the Northeast, a region hardest hit by record levels of snow this winter.
Sales fell 0.8 percent in the West.
Zillow, which tracks housing market trends, said that home builders are focusing on selling fewer but more expensive new homes.
While prices of existing homes fell 21 percent to an average of 205,000 last year from $259,000 in September 2005, which was ahead of the housing crisis.
Meanwhile, average prices for new homes hasn’t changed much in 10 years with prices coming in at $280,000 last year, just 1 percent below the median sales price of $283,000 in September 2005.