New home sales plunge in January
New homes were sold at a seasonally adjusted annual rate of 823,000 last month, down from a revised 966,000 pace in December, the Commerce Department said. This fell well short of consensus expectations among analysts, who had forecast a 936,000-unit sales pace for January.
The drop is the biggest since a 23.8% decline in January 1994, and the level of sales is the lowest since June 2000.
The data contrasts sharply with a recent report that showed a surge in sales of already existing homes in January, which economists attributed to mild weather and a return of consumer confidence.
Sales of new single-family homes fell sharply in the regions of the country where the volume is the greatest. In the South, sales fell by 22.1%, the steepest decline since April 1980 when Jimmy Carter was president.
Sales fell by 17% in the West, the biggest drop since February 1999. In the Midwest, sales fell by 0.6%, and in the Northeast, sales rose by 9%.