ECONOMY

US new home sales increase just 0.2 percent in January; housing market off to slow start

In this Jan. 8, 2015 photo, a flag advertising a new home for sale flaps in the breeze in Richmond, Va. The Commerce Department reports on U.S. sales of new homes in January on Wednesday, Feb. 25, 2015. (AP Photo/Steve Helber)

In this Jan. 8, 2015 photo, a flag advertising a new home for sale flaps in the breeze in Richmond, Va. The Commerce Department reports on U.S. sales of new homes in January on Wednesday, Feb. 25, 2015. (AP Photo/Steve Helber)  (The Associated Press)

Sales of new U.S. homes were basically flat in January, evidence that recent job gains and relatively low mortgage rates have yet to spur the real estate market.

The Commerce Department says new home sales slipped 0.2 percent last month to a seasonally adjusted annual rate of 481,000. This marks a slight decrease from sales of 482,000 homes in December, but represents a solid 5.3 percent gain from a year ago when harsh winter weather caused home-buying to stall.

Builders have increasingly focused on higher-end buyers, pricing many people out of the market for new houses. The median sales price rose 9.1 percent since January 2014 to $294,300.

Still, many economists expect that the hiring surge over the past year should boost sales after a weak 2014.