It was the fourth consecutive month of new home sales growth - despite a lull in the broader housing sector and a continued decline in existing home sales.
January's sales figures exceeded analysts' expectations. Analysts surveyed by the Wall Street Journal predicted 620,000 new home sales in January.
Compared to the same month last year, new home sales are still down 19.4%.
New home sales in December were revised up 7.2 per cent to 625,000 units, compared to an initial estimate of a 2.3 per cent rise to 616,000 units.
Monthly figures for new home sales are volatile and are often revised.
Key details. the median sales price of new homes sold in January was $427,500.
The supply of new homes for sale fell by 9.2% between December and January, equivalent to an eight-month supply.
Regionally, the South led the US in the number of new homes sold, with the figure surging by 17.1%.
The rest of the country saw a decline in the number of new home sales, with the largest drop of 19.4% in the Northeast.
With mortgage rates on the rise, homebuilders are offering incentives such as mortgage rate relief to attract buyers - and it's working.
With fewer existing homes on the market, buyers have more options if they are looking at new construction, which could boost sales.
The Dow Jones Industrial Average and the S&P 500 were down in early trading on Friday. the yield on the 10-year Treasury note rose above 3.93%.
The SPDR S&P Homebuilders ETF fell more than 1 percent, and builder stocks, including D.R. Horton Inc., Lennar Corp., PulteGroup Inc. and Toll Brothers Inc. were all lower in morning trading.