New single-family home sales fell sharply in the United States in January from a 10-month high, as experts noted that sales in the West region plunged. However, the overall housing market recovery remains intact.
Figures released Wednesday by the U.S. Commerce Department revealed single-family home sales dropped 9.2% last month to a seasonally-adjusted annual rate of 494,000 units, almost negating December's sharp increase. December's sales pace was unrevised at 544,000 units.
Economists had forecast new home sales, which account for about 8.3% of the housing market, slipping to only a 520,000 unit-rate last month.
Sales in the West, which has seen a sharp increase in home prices amid tight inventories, plummeted 32.1% to a 110,000 unit-rate, the lowest level since July 2014. The percent decline was the largest since May 2010.
Sales rose 3.4% in the Northeast, despite a blizzard in late January. They fell 5.9% in the Midwest and rose 1.8% in the populous South.
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.
