WASHINGTON— Sales of new U.S. homes slumped 6.9 per cent in January, a possible sign that buyers paused during the government shutdown.
The Commerce Department said new homes sold at a seasonally adjusted annual rate of 607,000 in January, down from 652,000 in December.
The partial government shutdown during January as well as a battered stock market, appear to have hurt sales, even as lower mortgage rates eased affordability pressures and boosted buyer interest.
A possible sign that buyers were waiting out the economic turbulence was the decline in sales of homes in which a groundbreaking has yet to occur.
Sales of unbuilt homes plunged 26.8 per cent in January after enjoying a sharp increase in December. The decline in this category accounted for all of the month’s decline. Sales increased of homes that were already under construction or completed.
Economists generally expect a sales rebound in 2019 after rising mortgage rates for much of 2018 caused sales of existing homes to slide downward for much of the year. But after peaking at nearly five per cent in 2018, the average 30-year mortgage rate has been hovering around 4.4 per cent in recent weeks, according to mortgage buyer Freddie Mac.
New-home sales in January ran slightly below the totals for 2018 and 2017. Buying fell in the Northeast, Midwest and South but rose in the West.
The median sales price of a new home in January fell 3.8 per cent to $317,200.