The Commerce Department reported Tuesday that sales of new single-family homes declined last month to a seasonally adjusted annual rate of 921,000 units. That followed a 14.9% rise in December, which pushed sales to a record monthly rate of 1.03 million.
“Despite very good financing conditions -- mortgage rates in January averaged close to 7% -- you've got the confidence problem, which is deepening, and is cutting into sales,” said David Seiders, chief economist for the National Association of Home Builders. “We've been worried about that particular tug of war for a couple of months.”
January's 10.9% drop was the biggest since January 1994, when new-home sales plunged by 23.8%.
All regions of the country reported a decline in new-home sales last month. The West posted the largest drop of 18.7% to a seasonally adjusted annual rate of 261,000. Sales in the Northeast plunged by 18.5% to a rate of 53,000. In the Midwest, sales fell by 7% to a rate of 160,000 and in the South, they declined by 6.3% to a rate of 446,000.