(Bloomberg) -- Sales of new homes in the US edged higher in January as builders and buyers capitalized on lower mortgage rates at the start of the year.

Purchases of new single-family homes increased 1.5% to a 661,000 annual pace after the prior three months were revised lower, government data showed Monday. The median forecast in a Bloomberg survey of economists called for a rate of 684,000.

The housing sector got off to a good start in 2024 with a retreat in mortgage rates boosting homebuilder sentiment and providing some traction for the resale market as well. However, with the Federal Reserve in no rush to lower borrowing costs, rates have been on the rise again, which could make any momentum in housing short-lived.

The median sales price of a home decreased to $420,700 in January from a year ago, marking the fifth-straight decline, as more homes became available for sale. New-home supply increased to 456,000 from the prior month, the most in over a year, according to the report issued by the Census Bureau and Department of Housing and Urban Development.

Sales jumped in the Northeast and West, while the Midwest posted a more modest gain and transactions declined in the South.

New-home sales are seen as a more timely measurement than purchases of previously-owned homes, which are calculated when contracts close. Those sales rose in January by the most in nearly a year.

The data are volatile, though. The government report showed 90% confidence that the change in new-home sales ranged from a 18.4% decline to a 21.4% gain.

--With assistance from Chris Middleton and Augusta Saraiva.

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