New-home sales plunged 48% in January

Sales of new single-family homes dropped more than 48% to a record low, and prices slid 18% in January, compared with a year earlier, according to the latest data released today from the Department of Commerce. Sales fell to a seasonally adjusted rate of 309,000, down 10.2% from the revised December rate of 344,000 and down 48.2% from the January 2008 rate of 597,000. The West saw the biggest year-over-year decline, with sales tumbling 28% from December and 59.9% from a year earlier. Sales in the Northeast fell 12.5% from December and 50.9% from a year earlier. In the South, sales slipped 6.5% from December and 45.9% from a year earlier, while sales in the Midwest declined 5.6% from December and 33.8% from a year earlier. The average price of new homes sold in January was $234,600, down from $260,200 in December and $284,600 a year ago. The data also indicated that the median time it took to sell a new single-family home was 9.3 months, up from 9.2 months in December and 6.7 months a year earlier. The dismal results reflect the challenges home builders are facing as they compete with foreclosed homes and big inventories in the market.