WASHINGTON: Americans stepped back from buying new homes in January, as purchases plunged sharply in Western states where prices are typically higher.
The Commerce Department said Wednesday that new-home sales fell 9.2 percent last month to a seasonally adjusted annual rate of 494,000. Most of the decline stemmed from a 32.1 percent drop in sales in the West. Sales also slipped in the Midwest, while edging up in the Northeast and South.
The pace of buying new homes last month slipped below last year’s sales total of 501,000, a possible sign of mounting price pressures despite low mortgage rates and job gains that have pushed the unemployment rate down to 4.9 percent. But new-home sales also tend to be a volatile government report with revisions and large swings on a monthly basis.
Last month’s decrease potentially complicates the real estate outlook. Rising demand for existing homes had sparked hopes that builders will ramp up construction and sales of new homes will further accelerate.
Sales of existing homes rose 0.4 percent last month to a seasonally adjusted annual rate of 5.47 million, the National Association of Realtors said Tuesday. That increase comes on the heels of a strong 2015 when sales reached their highest level in nine years. Supply of homes has failed to increase in response to demand, causing the median sales price to rise 8.2 percent from a year ago to $213,800.