New single-family home sales, which account for nearly 9.1 percent of the American housing market, slightly dropped in January despite big falls in the snow-affected Northeast, while supply increased to the highest level since 2010, signaling towards a sluggish housing market.
The Commerce Department report, released on Wednesday, showed that the sales decreased 0.2 percent to a seasonally adjusted rate of 481,000 units annually.
The sales pace in December was revised from 481,000 units to up to 482,000 units, which is the highest level since June 2008.
Stephanie Karol, a senior economist at IHS Global Insight in Lexington, Massachusetts, said, “We are still taking sort of a meandering, bumpy path towards recovery. We expect housing will improve later this year due to the improvement in the labor market and credit conditions.”
Several economists had made forecast that the new home sales will decline to a 470,000-unit pace in January as compared to the same period last year when sales had gained 5.3 percent.
The analysts said that the sales may have been held back by the snow storms in the Northeast, where sales recorded their biggest decline since June 2012.
The housing index increased marginally and outperformed a broadly flat stock market in the United States. The shares of America’s second largest home improvement chain, Lowe’s Cos Inc, declined 0.64 percent despite it reported same-store sales significantly above the estimates of the analysts.
Federal Reserve Chair Janet Yellen on Tuesday informed a congressional panel that the country’s housing sector had not “recovered in the way that I would have anticipated.”