New Home Sales Plummet in January, Post Largest Monthly Decline in 13 Years

Sales of new U.S. homes fell 16.6 percent in January and prices were little changed as the number of new homes on the market decreased slightly, according to a government report on Wednesday showing some weakness in the unsteady housing sector.

The monthly decline was the sharpest in 13 years, since a 23.8 percent drop-off in January 1994.

New single-family home sales fell to an annualized rate of 937,000 units from an upwardly revised rate of 1.123 million units in December, the Commerce Department said.

Analysts polled by Reuters were expecting January sales to dip to 1.080 million from the previously reported rate of 1.120 million units in December.

In January, the median sales price of a new home rose $400 to $239,800 from $239,400 in December.

At the current sales pace, the supply of new homes available for sale rose to 6.8 months' worth from the 5.7 months' worth in December, which represents a 19.3 percent increase. There were a total of 536,000 new homes available for sale at the end of January, down 0.2 percent from December.

The Commerce Department's data comes a day after a Realtor trade group reported a stronger-than-expected month of existing home sales. The sales pace of previously owned homes rose 3.0 percent in January, the biggest jump in two years, the National Association of Realtors said.

Home resales, which represent 85 percent of the housing market, climbed to a 6.46 million-unit annual rate.

Across the regions, the West saw the sharpest decline in new home sales with a 37.4 percent drop. In the Northeast, new home sales fell 18.7 percent while they decreased 8.1 percent in the Midwest and 9.7 percent in the South.