By Greg Robb
Sales dropped 12.6% last month to a seasonally adjusted annual rate of 284,000. Economists had been expecting a pace of 300,000.
For December, sales were up a revised 15.7% to a 325,000 level, compared with the previous estimate of a 17.5% rise to 329,000.
Economists had been leery of the initially reported surge, attributing much of December’s gain to home buyers who rushed to take advantage of a tax break in California that expired at the end of 2010.
The less volatile three-month average edged up to 297,000 from 295,000.
In the West, sales pulled back in January, falling 36.5% to 66,000 units after a 62.5% jump in December. Sales also fell 12.8% in the South to a record low 143,000. Analysts were expecting weak sales in the region due to several severe winter storms during the month. Those declines were partially offset by a 54.5% rise in the Northeast and a 17.1% gain in the Midwest.
Compared with January 2010, last month’s sales were down 18.6%. Economists say new-home sales have remained in a relatively narrow range for months. Activity is expected to pick up this spring, but economists see no early hints of a pickup in activity.
In January, the number of unsold new homes on the market slipped 0.5% to 188,000, the fewest since December 1967. That represented a 7.9-month supply at the January sales pace, up from 7.0 in December.
The inventory of completed-but-unsold homes fell to 78,000, down about 21.2% in the past year.
The median sales price of $230,600 in January was up 5.7% compared with a year earlier.
New-home sales are reported when a contract is signed, not at the closing of the sale.
The government cautions that its housing data are subject to large sampling and other statistical errors. Large revisions are common.
The National Association of REALTORS® recently reported that sales of existing U.S. homes rose a seasonally adjusted 2.7% in January, the fifth rise in six months, as buyers snapped up cheaper homes.
In a separate report, the government said orders for durable goods rose 2.7% in January, largely as a result of an increase in orders for civilian aircraft. In addition, initial claims for state unemployment insurance fell 22,000 to 391,000 in the latest week.
(c) 2011, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.
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