New U.S. Home Sales Drop 16.6%

Largest drop in 13 years.

Sales of new homes plunged 16.6% in January, marking the sharpest fall since January 1994, the government said Feb. 28. The Commerce Department said new home sales slumped by more-than-expected in January to an annualized clip of 937,000 homes, defying most economists who had only expected sales to fall to 1.08 million.

The level of sales was the weakest on record since February 2003. The report also showed that sales of new homes has fallen a hefty 20.1% compared with January 2006.

The country's housing market entered a national downturn last year following several years of rapid growth which triggered a speculative frenzy in some markets including Florida and Nevada.

Sales slowed over the past year amid interest rate hikes and surging oil prices, although interest rates have remained steady since August and oil prices have cooled from highs struck last summer.

However, concerns have mounted in recent weeks as some mortgage lenders have gone out of business, mainly due to riskier mortgage loans made to people with poor credit records.

The government said the median price of a new home rose slightly in January to $239,800 compared with $239,400 in December. January's price, however, is down from the median price of $244,900 a year ago.

Copyright Agence France-Presse, 2007

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish