New-home sales in the Midwest was the only bright spot in a government report that sales nationwide plunged to a record low in January.
Sales of new homes in the Midwest increases 2.1 percent while sales nationwide dropped 11.2 percent, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.
The Commerce Department reported Wednesday new-home sales dropped to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly a half century. The big drop was a surprise to economists who had expected sales would rise about 5 percent over December’s pace.
The January decline will heighten fears about the fledgling recovery in housing. Economists were already worried that an improvement in sales in the second half of last year could falter as various government support programs are withdrawn.
The sales decline in January marked the third straight monthly drop following decreases of 3.9 percent in December and 9.5 percent in November.
January’s weakness was evident in all regions except the Midwest. Sales were down 35 percent in the Northeast, 12 percent in the West and almost 10 percent in the South.
The drop in sales pushed the median sales price down to $203.500. That was down 5.6 percent from December’s median sales price of $215,600, and off 2.4 percent from year-ago prices.
Distributed via Chicago Press Release Services