Sales of new homes in the United States sizzled in January, rebounding from a December decline amid shrinking inventory, government data released Tuesday showed.
January sales jumped to an annual rate of 437,000, a 15.6 percent increase from the revised December reading of 378,000, the Commerce Department reported.
The better-than-expected pace at the start of 2013 offered fresh evidence of recovery under way in the housing market, where new-home sales were up nearly 20 percent in 2012 from the prior year.
Compared with January 2012, new-home sales were up 28.9 percent.
Sales rose in all four regions, with the West showing the strongest gain, a whopping 45.3 percent from December.
The supply of homes on the market fell to 4.1 months at the current sales rate, down 14.6 percent from December.
Nevertheless, prices weakened in January, with sellers getting a median price of $226,400 and an average price of $286,300.
IHS Global Insight analysts warned against reading too much into the monthly new-home sales numbers, which are typically revised substantially.
But they pointed out that the 4.1 months' supply of new homes was the lowest reading since March 2005.
"Home builders will have to ramp up building to meet demand, which suggests continued strong gains in construction employment and continued contributions to GDP from residential investment ahead," the analysts said in a research note.
The January sales improvement also was reflected in last week's numbers on existing-home sales from the National Association of Realtors, which edged up 0.4 percent from December and were up 9.1 percent year-over-year.
"Home sales -- both new and existing -- are gaining momentum," said Mei Li of FTN Financial. "New home demand is growing as a result of a brighter economic outlook, relatively low mortgage rates and a reduced supply of existing homes for sale."
A closely watched home price index released Tuesday showed prices rose in December, capping a year of solid gains as the sector slowly recovers from the 2006 collapse of a price bubble.
The Standard & Poor's/Case-Shiller 20-city home price index price index jumped 6.8 percent from a year ago.
On a seasonally adjusted basis, there were no monthly declines in December in any of the 20 cities.
But on a quarterly basis, prices slipped slightly in the 2012 final quarter from surges in the second and third quarters, David Blitzer of the S&P index committee noted.
"These movements, combined with other housing data, suggest that while housing is on the upswing, some of the strongest numbers may have already been seen," Blitzer said.