Sales of new United States homes dropped more than forecast in January

Sales of previously owned homes reached a six-month high in January, and home prices were up 5.7% in the year ended in December.

Economists were forecasting new home sales to slip to 520,000 units.

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.

Concerns regarding price gains have continued to grow in the residential industry, as analysts have warned the lack of affordable options for first-time buyers continues to push prices up, pricing many potential buyers out of the market.

Sales last month plunged 32.1% in the West and declined 5.9% in the Midwest. Total sales during the past five months have been 184,000, barely 2 percent higher than the 180,000 seen in the same five months in the previous year. But new-home sales also tend to be a volatile government report with revisions and large swings on a monthly basis. Many analysts have blamed tight supplies for rapidly increasing home prices in some markets.

The estimate of new houses for sale at the end of January was 238,000, up from 233,000 at the end of December.

On Tuesday, the National Association of Realtors released a separate report showing an unexpected increase in existing home sales in January.

I think Boak was trying to say that new-home prices are higher than most Americans can afford. It was 5.2% lower than the same period a year ago. 24, 2016, the Commerce Department reports USA home sales crept upward in January, a sign that demand for housing remains strong amid signs of slower growth across the broader economy. This is up 20.8% compared to January 2015 when there were only 4.8 months in supply. The trouble is that the current USA population is nearly 12 percent greater, meaning that a genuine recovery in existing-home sales would require an annual rate of over 6 million.