New homes sales in January dropped below 500,000, according to a release from the Commerce Department Wednesday morning. The slump in January still falls in a healthy range seen in recent months, but comes in the wake of December's notable bump, when new home sales reached a nine-month peak in a traditionally slow season.

Sales of new single-family homes reached a seasonally adjusted annual rate of 494,000 in January, down -9.2% from the revised rate of 544,000 in December 2015. This is also a -5.2% drop year-over-year, when sales reached 521,000. The average sales price rose to $365,700 from last month's $347,700, while the median sales price dropped slightly to $278,800 from December's $295,800. Homes in the price range of $150K-$199K, $200K-$299K, and $300K-$399K were the three most desired options in January, accounting for 18%, 34%, and 18% of total sales, respectively.

The drop in new home sales is partially due to seasonal slowdown, but pricing growth, global economic turmoil, and plunging energy prices likely made a bigger impact on the confidence of prospective new home buyers, despite continued job growth and eased mortgage rates. Affordability concerns are causing more consumers to fix their eye on the existing home market. According to a release from the National Association of Realtors Tuesday morning, existing home sales gained momentum with a six-month high in January, in stark contrast to month-over-month and year-over-year losses in new home sales during the same period.

A total of 238,000 new houses are estimated to be on the market at the end of January, which represents 5.8 months of supply at the current sales rate. This is up 20.8% compared to January 2015 when there were only 4.8 months in supply.

The South region reported more sales than the other three regions combined, with 290,000 houses sold during January. The largest month-over-month growth, however, took place in the Northeast region, as 3.4% more houses were closed than the previous month. The Midwest and West market reported 64,000, and 110,000 in sales, respectively. Year-over-year, the Northeast region has also made the biggest gains in new home sales, with 100% growth from January 2015.

Read the full release here >>