USA Today
WASHINGTON (AP) — Sales of new homes fell for the second time in three months in January, providing further evidence that the nation’s five-year housing boom is slowing.
The Commerce Department reported Monday that sales of new single-family homes dropped 5% to a seasonally adjusted annual rate of 1.233 million units last month.
That was a bigger drop than analysts had expected and provided support to the view that the housing market, after setting sales records for five straight years, is slowing as mortgage rates rise.
The 5% January drop in sales followed a revised 3.8% increase in December. Sales fell 7% in November.
The number of new homes available for sale at the end of January rose to a record 528,000. At the current sales pace, that represented 5.2 months’ supply — the largest inventory since November 1996.
Despite the fall in sales, the median price of a new home was up in January to $238,100, compared with $229,000 in December. The median is the point where half the homes sold for more and half for less. The January figure was the highest since an all-time high of $243,900 set in October.
Economists had expected sales to be supported last month by the warmest January in more than 100 years of record-keeping. Unusually mild weather pushed up construction of new homes and apartments 14.5% last month, the biggest increase in more than three decades.
However, the milder weather did not have the same positive effect on sales which fell in all regions of the country except the West.
The biggest decline was a 14.9% decrease in sales in the Northeast, which followed an even bigger 23% plunge in sales in December. Sales in the Midwest were down 10.8% after having risen by 21.2% in December.
Sales fell 10.3% in the South in January following a 1.2% gain in December.
Bucking the national trend, sales in the West posted an 11.3% increase in January after a 6.3% gain in December.
