The Commerce Department said on Thursday new home sales declined 6.9 percent to a seasonally adjusted annual rate of 607,000 units. December's sales pace was revised higher to 652,000 units from the previously reported 621,000 units.
Economists polled by Reuters had forecast new home sales, which account for about 11 percent of housing market sales, slipping 0.6 percent to a pace of 620,000 units in January.
New home sales are drawn from permits and tend to be volatile on a month-to-month basis. They fell 4.1 percent from a year ago. Affordability remains a challenge, especially at the lower end of the market, even as mortgage rates have dropped to last year's highs and house price inflation has slowed.
Expensive lumber as well as land and labor shortages continue to constrain builders.
Economists expect the housing market, which hit a soft patch last year, to remain sluggish through the first half of 2019. Investment in homebuilding contracted 0.2 percent in 2018, the weakest performance since 2010.
The release of the January new home sales report was delayed by a 35-day partial shutdown of the federal government that ended on Jan. 25. February's new home sales report, which was scheduled for release on March 25, will now be published on March 29.
New home sales in the South, which accounts for the bulk of transactions, tumbled 15.1 percent in January. Sales dropped 11.4 percent in the Northeast. Sales in the Midwest plunged 28.6 percent to the lowest level since January 2014. But sales rose 27.8 percent in the West to a 10-month high.
The median new house price fell 3.8 percent to $317,200 in January from a year ago. There were 336,000 new homes on the market in January, down 1.5 percent from December. Supply is, however, just over half of what it was at the peak of the housing market boom in 2006.
At January's sales pace it would take 6.6 months to clear the supply of houses on the market, up from 6.3 months in December. Just under two-thirds of the houses sold last month were either under construction or yet to be built.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)