WASHINGTON – Sales of new U.S. homes fell in January for the second straight month, possibly dragged down again by bad weather.
The Commerce Department reported Monday that last month's sales came in at a seasonally adjusted annual rate of 593,000, the lowest level since August and down 7.8 percent from a revised 643,000 in December.
Economists had expected new home sales to bounce back after tumbling amid harsh winter weather in December. But they may have underestimated how bad January's weather turned out to be.
"There are good reasons to think that weather may have played a factor in the January result, as there were rare snowstorms in the South, fires and mudslides in California, and the normal occasional disruptions in the North," Stephen Stanley, chief economist at Amherst Pierpont Securities, wrote in a research note.
Sales skidded 33.3 percent in the Northeast in January from December and 14.2 percent in the South. But they rose 15.4 percent in the Midwest and 1 percent in the West.
The median price of a new home dropped to $323,000, down 4.1 percent from $336,700 in December.
Economists have complained about a shortage of houses on the market. But the inventory of new homes for sale rose to 301,000 in January, most since March 2009.
The housing market is beginning to contend with a steady increase in mortgage rates. Rates on long-term home loans have risen seven straight weeks. The rate on a benchmark 30-year, fixed-rate mortgage last week hit 4.4 percent, the highest level since April 2014.
Still, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "Any weakening on the back of the rise in mortgage rates likely won't be visible until late spring at the earliest."