WASHINGTON – Sales of new homes in the United States plunged 11.2 percent in January from December to a historic low, the government reported Wednesday in a fresh sign of weakness in the troubled housing market.
Sales of new single-family houses fell to a seasonally adjusted annual rate of 309,000, from a revised December rate of 348,000, the Commerce Department said.
The third consecutive month of declining sales surprised most analysts who had expected sales to increase to 354,000. The pace of new-home sales was the weakest in the official data series begun in January 1963.
The decline was broad-based in January, typically a slow month in home sales as winter weather grips much of the country. The January reading was 6.1 percent below the year-ago rate of 329,000 units, which was the previous record low.
“Sales of new homes are starting the year off on surprisingly weak footing,” said Celia Chen at Moody’s Economy.com.
“The dismal performance of new-home sales indicates that the housing market remains quite fragile, despite efforts to shore up demand. The extension and expansion of the first-time homebuyer tax credit have yet to influence sales of new homes, but the positive impact will become evident in the early spring.”
The Moody’s analyst noted that another wave of foreclosures was expected, which would sharply curb improvements in the housing market through the rest of the year.
Home prices continued to slump as consumers were sidelined by worries about the strength of the economic recovery from recession and high unemployment.
The median sales price of new houses — the mid-point between the highest and lowest prices, was 203,500 dollars in January, down from 215,600 dollars in December.
The average sales price was 254,500 dollars in January, down from 274,400 dollars. The inventory glut of unsold homes on the market rose for the third month running, to a seasonally adjusted 234,000. At the current sales pace, it would take 9.1 months for the inventory to be sold, the slowest rate since last June.
