New Homes Sales Drop 11.2% in January
New home sales dropped 11.2% from December to January to a seasonally adjusted annual rate of 309,000, according to estimates released by the Census Bureau and the Department of Housing and Urban Development (HUD). December’s original estimated rate was 342,000, a drop of 7.6% from November. December’s rate was later revised to 348,000. January’s rate was 6.1% below the January 2009 estimate of 329,000. Sales took the biggest dive in the Northeast, where 24,000 homes were sold in January, compared to 37,000 in December, a decline of 35.1%. In the West, sales declined 11.9% to 74,000 from 84,000. In the South, sales declined 9.5% to 162,000 from 179,000. The Midwest was the only region to see a month-over-month increase, up 2.1% to 49,000 from 48,000. The Census and HUD said the median sales price for new homes sold in January 2010 was $203,500, while the average was $254,500. The December median was $221,300 and the average was $290,600. The seasonally adjusted estimate of new houses for sale at the end of January was 234,000, representing a supply of 9.1 months at the current sales rate. That’s up from an 8.1-month supply in December. The double-digit drop in sales comes as builders are worried that changes to Federal Housing Administration (FHA) guidelines will hurt sales. Builders have been ramping up production in anticipation of increased demand for spec homes before the expiration of the homebuyer tax credit, according to John Burns Real Estate Consulting (JBREC). As HousingWire previously reported, the firm’s president, John Burns, believes the tax credit may be extended if the housing market remains stalled. Write to Austin Kilgore.