Washington – The backlog of unsold new homes reached a record level last month as sales slipped despite the warmest January in more than 100 years.
The Commerce Department reported Monday that sales of new single-family homes dropped by 5 percent to a seasonally adjusted annual rate of 1.233 million units last month.
That was the slowest pace since January 2005 and left the number of unsold new homes at a record high of 528,000.
Analysts viewed the new data as further evidence that the nation’s red-hot housing market, which hit record sales levels for five straight years, has started to cool.
“The decline in new-home sales in January makes it clear that there is some real softening in the housing market,” said Joel Naroff, chief economist at Naroff Economic Advisors.
The 5 percent decline was bigger than expected, dashing hopes that the mild January would bolster demand.
The warm weather had pushed up the level of construction starts last month by 14.5 percent, the fastest rate in three decades.
But the new report showed that with sales lagging, the increase in building activity left 528,000 new homes still for sale at the end of the month, a nine- year high.
Even with the softening in sales, prices were up in January with the median price climbing to $238,100, up 4 percent from December but below the all-time high of $243,900 set in October.
David Seiders, chief economist at the National Association of Home Builders, predicted that home-price gains, which were running around 12 percent last year, will slow to about 6 percent this year.
