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New home sales stumble in January

Sales of new U.S. homes fell unexpectedly in a colder-than-usual January to their lowest level since May as the vibrant housing market gave fresh signs of slowing, a government report showed on Thursday.
/ Source: Reuters

Sales of new U.S. homes fell in a harsh January to the lowest level since May but still beat expectations as the housing market slowed only slightly from record highs, a government report showed on Thursday.

The Commerce Department said sales of new single-family homes slipped 1.7 percent to a seasonally adjusted 1.106 million annual rate from an upwardly revised 1.125 million rate in December.

Analysts polled by Reuters had on average forecast a slight climb to a 1.065 million rate from the originally reported 1.060 million pace.

The dollar firmed on the report as traders saw the data as evidence of the stamina of the long-running housing boom.

“Though one could talk about softening at the margin, I think the better story is that home sales remain extraordinarily vigorous, especially considering that, if anything, weather may have depressed the January results somewhat,” Greenwich Capital Markets chief economist Stephen Stanley said.

Inventories rose to 4.1 months’ supply of homes available for sale at the current sales pace. The total number of homes on the market was 370,000, the biggest supply since December 1995.

The median new home sales price was $197,000, up 8.4 percent from $181,700 in the same month a year ago.

Housing starts and existing home sales also declined in January, earlier reports showed. Analysts attributed the slide in part to harsher weather than normal in much of the country, but have said some slowdown is inevitable after a record year for housing activity in 2003.