WASHINGTON, Feb. 26 - Newly reported data from the U.S. Commerce Department indicates that sales of newly built, single-family homes fell 10.2 percent to a seasonally adjusted annual rate of 309,000 units in January, which is a new record low.
"As disturbing as this report sounds, there is reason to believe that some potential home buyers may have purposely delayed action in January as they waited to see how details of the President's economic stimulus plan could affect a home purchase," said Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. "Now that those details are known - particularly those relating to the new first-time home buyer tax credit and higher loan limits for government-backed mortgages - we are hopeful that many buyers will be looking to take advantage of them in the coming months."
"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 NAHB Chief Economist David Crowe. "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."
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 percent in the Midwest, 6.5 percent in the South and 28 percent in the West. The Northeast was only exception to the rule, registering a 12.5 percent gain for the month.