WASHINGTON, Feb. 27 (Xinhua) -- Sales of new homes across the United States dropped by 2.8 percent in January to a seasonally adjusted annual rate of 588,000 units, the lowest point since February 1995, the Commerce Department reported Wednesday.

    It was the third consecutive month that new-home sales declined. The January sales were 33.9 percent below the year-ago level.

    Regionally, new-home sales dropped by 10.3 percent in the Northeast, 7.6 percent in the Midwest and 2.4 percent in the South. In the West, however, sales climbed up by 2.2 percent in January.

    The median price of a new home, a typical market price where half of new homes are sold for more and half sold for less, fell by 4.3 percent last month to 216,000 dollars, the lowest level since September 2004.

    The slowdown in sales raised inventories of unsold new homes at the end of January to 482,000 units. That represented a supply of 9.9 months at the current sales rate, up from December's supply of9.5 months.

    The once-sizzling U.S. housing market has cooled off significantly since 2006. The slump in the housing sector is expected by economists to continue amid a widening credit crisis stemming from troubles in the U.S. subprime mortgage market, where loans are given to homebuyers with weak credit histories.