Newly built single-family homes also saw an increase in sales in 2017.

Sales of these homes increased 3.7 percent in January. This is seasonally-adjusted annual rate of 555,000 homes, reported the U.S. Department of Housing and Urban Development and the U.S.. Census Bureau, according to a recent release from the National Association of Home Builders.

“This increase in new home sales is in line with our forecast for a steady, gradual recovery of the housing market,” said Granger MacDonald, chairman of NAHB. “However, the pace of growth may be hampered by supply-side headwinds, such as shortages of lots and labor.”

Median sales price of newly built single-family homes sold came in at $312,900. Inventory of newly built single-family homes is currently at a 5.7-month supply at the existing sales pace. In January, inventory hit 265,000.

“We can expect further growth in new home sales throughout the year, spurred on by employment gains and a rise in household formations,” said NAHB Chief Economist Robert Dietz. “As the supply of existing homes remains tight, more consumers will turn to new construction.”

The Northeast saw the highest increase in sales, rising 15.8 percent, with 44,000 new homes sold in January, compared to 38,000 in December. The Midwest also saw a large increase, rising 14.8 percent from 61,000 new homes sold in December to 70,000 in January. The South saw a slight rise, increasing 4.3 percent from 278,000 in December to 290,000 in January. However, sales in the West did see a decline of 4.4 percent, decreasing from 158,000 in December to 151,000 in January.