The Commerce Department reported on Wednesday that new U.S. home sales plunged in January to the lowest point since 1963. According to stats from the department, January saw an 11.2 percent drop, which brought new home sales down to a seasonally-adjusted rate of 309,000. This is the third straight month-to-month drop.
The Numbers Are Surprising
Economists who had been surveyed by MarketWatch had actually forecasted sales to rise slightly, not have a record plunge. The pace expected was 355,000 and was thought to occur because homebuyers had supposedly been taking advantage of the home buyer tax credit that had recently been expanded to include homeowners who wanted to upgrade to bigger homes.
While some experts believe that weather (the recent blizzards) may have played a role in the drop in new home sales, the data is still a huge shock and is a bit unnerving.
The Housing Industry Is Still Struggling
The record-low numbers show that the industry is still struggling to recover from the housing crash. The new home sales reported for January 2010 were down 6.1 percent compared with January 2009 when sales were at 329,000. Believe it or not, that was the previous record low, which shows housing isn’t improving yet.
But with mortgage rates still low, the median sale price of a new home having dropped 2.4 percent compared to a year earlier and the home buyer tax credit still going strong for a month or so, homebuyers still have a shot at getting a home at an affordable price. So if you want one, now’s the time to get out there and shop around.
It’s about time. Home prices were out of this world. Some homes I see aren’t worth more than $10,000. That is what they cost in 1950 and they are the same. Anyone pays more than that is thowing money away.