Sales of newly built, single-family homes increased 3.7 percent last month, reaching a seasonally adjusted annual rate of 555,000 units, the Commerce Department reports.

"We can expect further growth in new home sales throughout the year, spurred on by employment gains and a rise in household formations," says Robert Dietz, chief economist of the National Association of Home Builders. "As the supply of existing homes remains tight, more consumers will turn to new construction."

The median price of new homes in January reached $312,900, the Commerce Department reported. Inventories of new homes for sale was 265,000 last month, a 5.7-month supply at the current sales pace.

New-home sales saw the biggest increases in January in the Northeast, where sales rose 15.8 percent month over month. The Midwest posted a 14.8 percent gain, while the South saw a 4.3 percent rise. The West was the only major region to see a decrease in new-home sales last month, falling 4.4 percent month over month.

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

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