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NEW YORK (CNN/Money) - New home sales tumbled 9.2 percent in January, the government reported Monday, coming in well below Wall Street forecasts, and economists expressed mixed opinions about what was next for the nation's housing market.
Some analysts said a slowdown was coming, in what could be a worrisome sign for housing as well as the broader economy. But others noted the January declines were exacerbated by bad weather and weren't as bad as they first appeared.
The strong housing market has been a mainstay of support for the broader economy in recent years.
Sales of new one-family homes fell to a seasonally adjusted annual rate of about 1.11 million in January from a revised December rate of 1.22 million, the Commerce Department said.
Economists had estimated that new home sales would come it at about 1.13 million in January, according to a survey by Briefing.com.
"Today's number is a sign of slowing ahead," said Michael Darda, chief economist at MKM Partners. "But that's not a negative thing. With the dramatic price appreciation we've seen, we don't want to see a runaway market out of control."
Meanwhile, sales of existing homes -- the far larger part of the housing market -- edged down 0.1 percent in January but still ran at the seventh highest pace on record, a real estate group said Friday.
January's drop in new home sales follows a 9 percent jump to a record high last year, according to Briefing.com. Low mortgage rates have helped keep buyers in the market, though that may change now that mortgage rates -- and long-term Treasury bond yields -- have started creeping higher.
"If you take into account the revisions, the average for the last three months are still very strong," Stuart Hoffman, chief economist at PNC Financial Services, told Reuters. "It's consistent with the housing starts number. People are still active in home buying. This decline in January is probably a month dip. It's a head-fake."
By region, sales posted the sharpest drop in the Midwest in January, down 40.3 percent, and fell 17.1 percent in the Northeast, the government said in its report.
"Winter weather really takes the sting out of these declines," said David Seiders, chief economist with the National Association of Home Builders.
"Now what happens to the market depends on the interest rate structure. Long rates have been better than expected, but I think we can see them rising, moving into alignment with what's going on with the economy and with short-term rates," Seiders added.
The median price of new homes sold in January 2005 hit $199,400, down 4.8 percent from the same period last year, according to Commerce. According to Reuters, this is down sharply from December's $229,700 and marks the lowest price since December 2003.
The seasonally adjusted estimate of new houses still on the market at the end of January was 438,000. This represents a supply of 4.7 months at the current sales rate, up from 4.2 months in December.
January's supply was the highest since June 2000, the government reported.
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