New Home Sales Plunge 14.8% in January

Failing to match 2001’s record performance, sales of new homes plummeted 14.8% in January compared with December, the Commerce Department reported Wednesday. It was the biggest single-month decline in eight years.

Home sales can provide a boost to some segments of the trucking industry as people move out of their old homes and into new ones.

The drop-off took new home sales down to an annual rate of 823,000 homes. After revision, the rate was 966,000 in December.

The decline is the biggest since a 23.8% drop in January 1994, and the level of sales is the lowest since June 2000.

Analysts had been projecting a slight fall off in new home sales, dropping them to a pace of 940,000 units per year.

In 2001, the lowest interest rates in four decades helped bring out homebuyers in record numbers. Despite the U.S. economy being mired in a recession for three-quarters of 2001, 906,000 new homes were sold during the year.

The new home sales figures contrast with other recent home sales figures. Monday, the National Association of Realtors said that existing home sales jumped 16.2% in January and last week, Commerce reported a 6.3% increase in housing starts.

Bloomberg cited analysts who said the housing market will continue to be strong, but it is unlikely that it will drive an economic recovery on its own.