January’s new-home sales report, released today by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, was a mixed bag. The bad news was that sales of new single-family homes were down 0.9% from December to report a seasonally adjusted annual rate of 321,000, although that number is still 3.5% above January 2011’s estimate.

The average sales price for new homes sold during the month was $261,600, down from December's average of $266,000. The median price of new homes sold in January was $217,100.

The good news came in the form of significant upward revisions to estimates for October, November, and December. October’s revision brought the month’s estimated annual rate to 311,000 from 307,000; November’s annual estimate rose from 315,000 to 318,000; and December’s annual estimate shot up from 307,000 to 324,000.

The welcome edits "were large enough to signal a budding recovery," wrote Patrick Newport, U.S. economist at IHS Global Insight, in a statement regarding the numbers. However, the bud is still small, he emphasized, adding that "last August, sales were running at a 290,000 annual rate. They are now running at just above 320,000—normal is a number about 800,000—so the recovery, if it has started, has a ways to go."

While the Northeast and South were the two regions to show improvement last month, it has been the South and West that have driven the overall gain the industry has seen in recent months, a trend Newport attributes to people migrating to warmer areas, as has been seen in recent population estimates.

Improving sales have helped to bring down inventory, which hit a record low level in January with only 151,000 new homes for sale, a 5.6-month supply at the current pace.

Newport expects to see improvement in new-home sales this year, compared to last year’s record low. He predicts sales levels will rise to 352,000 this year, compared to 304,000 in 2011. But as for getting back to normal, he’s not anticipating sales exceeding the 800,000 mark until 2015.

Claire Easley is a senior editor at Builder.

Learn more about markets featured in this article: Greenville, SC.