New home sales dropped more than expected in January, almost erasing the gains witnessed in December.

The Commerce Department said new-home sales fell to a seasonally-adjusted annual rate of 284,000 (well below expectations of 300,000) and down 12.6 percent from the revised figure of 325,000 recorded in December.

Demand for new homes were especially weak in the West (down 37 percent) and in the South (down 13 percent).

Overall, new-home sales are down 18.6 percent over the year-ago period.

The supply of new homes fell 0.5 percent to 188,000 units.

Median sales prices have risen 5.7 percent in the past year to $230,600.

“With a lot of new homes in areas with a lot of foreclosures and excess inventories, we would assume the new-home category would be the slowest to recover,” Mike Englund, chief economist at Action Economics, said prior to the report’s release, according to Bloomberg. Also, “new home sales are sensitive to weather, combined with the fact we saw a pop in December.”