New home sales dipped in January, the second consecutive monthly drop, the Commerce Department said Tuesday.

Sales dropped 5% to a seasonally adjusted annual rate of 918,000, after a 3.6% decline in December. Observers attributed the decline to an uptick in long-term interest rates, with some 30-year mortgage rates now topping 7% for the first time in months.

Despite the declines from the preceding month, sales in January remained 8.3% above the previous year's pace, when new homes were selling at a rate of 848,000 a year.

The Commerce Department said there were 302,000 new homes completed and ready for sale at the end of January, the highest number since 308,000 were on the market in January 1997 and up from the 297,000 that were available at the end of December.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.