New home sales drop for 2nd month in a row

WASHINGTON — Sales of new U.S. homes fell for the second straight month in January, failing to rebound from a weather-related drop in December.

The Commerce Department says last month's sales came in at a seasonally adjusted annual rate of 593,000, the lowest 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 in December as harsh winter weather chilled demand.

"We made some allowance for the impact of the severe weather at the start of the month, but apparently not enough," wrote Ian Shepherdson, chief economist of Pantheon Macroeconomics, in a 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.

Still, there is a lot of variability in the month-to-month figures, which tend to get revised substantially, noted Jim O'Sullivan, chief U.S. economist at High Frequency Economics. "Through the volatility, the trend has been up," he wrote in a note. Last year, monthly home sales averaged 615,000, up from 561,000 in 2016, 503,000 in 2015 and 440,000 in 2014.