WASHINGTON — Sales of new homes plunged to a record low in January, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.
The Commerce Department reported Wednesday that new- home sales dropped 11.2 percent last month 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 were expecting a 5 percent increase over December’s pace.
While winter storms were partly to blame, home sales have fallen for three straight months despite sweeping government support.
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that an improvement in sales in the second half of last year could falter as various government support programs are withdrawn.
A rebound in housing in the second half of last year helped boost overall economic growth back into positive territory. Each new home built, for example, creates about three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders. The Associated Press
