According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built, single-family homes dropped 9.2 percent in January to a seasonally adjusted annual rate of 494,000 units.
"After an unusually high December reading, some pullback is to be expected," said Ed Brady, chairman of the National Association of Home Builders (NAHB) and home builder and developer from Bloomington, Ill. "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," said NAHB Chief Economist David Crowe. "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."
The inventory of new homes for sale rose to 238,000 in January, which is a 5.8-month supply at the current sales pace and the highest level since October 2009.
Regionally, new home sales rose 3.4 percent in the Northeast and 1.8 percent in the South. Sales dropped 5.9 percent in the Midwest and 32.1 percent in the West.