Sales of new homes plunged even lower than expected in January to a seasonally adjusted rate of 309,0000, according to data released today by the U.S. Census Bureau.
Compared to December, that represents a 10.2% drop in sales activity. Analysts had expected a new record low for new-home sales in January, given the state of the economy, the large volume of existing homes for sale at bargain prices, and the ongoing negotiations regarding a housing tax credit in the stimulus package. But January’s sale pace plunged even lower than experts’ forecast of 324,000.
Many believe that consumers’ uncertainty regarding the housing tax credit affected existing-home sales in January, which dipped 5.3% compared to the previous month, according to data released yesterday by the National Association of Realtors.
On an annual basis, January’s new-home sales figures translate into a 48.2% reduction. Inventories stand at 342,000 homes, which is relatively low, but given the current sales pace, equates to 13.3 months of supply. New homes sold in January had been on the market for 9.3 months, a period of time that continues to lengthen.
Meanwhile, home prices are still trending downward. The median sales price for a new home in January dropped 9.9 % compared to the previous month, to $201,100.
Ironically given today’s figures, builders have sounded more optimistic recently than they have in months, with many reporting improved buyer traffic in January. Even the NAHB/Wells Fargo Housing Market Index improved by one point in February, albeit to a still-low reading of 9.
Alison Rice is senior editor, online, at BUILDER magazine.