Sales of newly built, single-family homes fell 10.2% to a seasonally adjusted annual rate of 309,000 units in January, which is a new record low.
"Clearly, the downward pressures that have been exerting themselves on the housing market remain in place, including the weakened economy, ongoing job losses and very low consumer confidence," said David Crowe, chief economist for the National Association of Home Builders (NAHB). "But as more home buyers find out about the newly enhanced tax credit, and other parts of the economic stimulus package start kicking in, we expect to see some firming effect on home sales. The hope is that a certain amount of pent-up demand will be released as those who were in a 'wait-and-see' mode decide they now have the information they need to proceed."
NAHB said that home builders continued to do a good job of reducing their inventories in January, with the number of new homes on the market falling for a 21st consecutive month to 342,000 units. However, due to the historically slow sales pace, the months' supply continued to rise for a fourth consecutive month, to 13.3.
Three out of four regions posted declining new-home sales in January. Sales fell 5.6% in the Midwest, 6.5% in the South and 28% in the West. The Northeast was only exception to the rule, registering a 12.5% gain for the month.
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