New US single-family home sales fell in January, but an upward revision to the prior months’ data and a drop in the supply of properties on the market added to growing signs of a recovery in the housing sector.

The Commerce Department said sales slipped 0.9 per cent to a seasonally adjusted 321,000-unit annual rate. Compared to January 2011, new home sales were up 3.5 per cent. Despite the weak sales last month, the report gave further fresh signs of green shoots in the housing market, with the months’ supply of homes on the market falling to 5.6 months, the lowest since January 2006.