US new home sales rise less than expected in January

Sales of new US single-family homes rose less than expected in January, according to official data released on Friday.

Figures from the Commerce Department showed new home sales were up 3.7% from December's revised rate of 535,000 to a seasonally-adjusted rate of 555,000, and 5.5% above the January 2016 level. Analysts had been expecting a bigger jump on the month to 570,000.

The December reading was revised down a touch from a previous estimate of 536,000.

Meanwhile, the median price of new houses sold in January was $312,900, down 1% from December but 7% higher compared to a year ago.

The seasonally-adjusted estimate of new houses for sale at the end of January was 265,000, which represents a supply of 5.7 months at the current sales rate.

Pantheon Macroeconomics said: "This is mildly disappointing, because we thought the exceptionally warm weather last month, relative to normal, would lift sales. New home sales are measured at the point contracts are signed, often at temporary offices on
construction sites, so mild weather tends to encourage more potential buyers to visit developments.

"Sales were indeed a bit higher than the 525K implied by lagged mortgage applications data, but we hoped for a bigger overshoot. The next couple of months should see sales rebounding, reaching about 600K by March, but after that the picture is cloudy; we need to see how people respond to the rise in mortgage rates."