There was a drop in sales of new homes in the US in January according to new data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

Interest rate rises appear to be moderating demand slightly, however the National Association of Home Builders remains confident that the market is strong.

“New home sales have taken a pause this month, but our builders are reporting confidence in the overall market and future sales conditions,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “With strong consumer demand for housing, we expect the sales numbers to move forward in the months ahead.”

Sales of new homes in the Northeast region slumped 33.3% with states in this part of the US hit the hardest by recent changes to the US tax code.

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