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US new home sales fall more than expected in January
[WASHINGTON] Sales of new US single-family homes fell more than expected in January, suggesting the housing market weakness persisted early in the first quarter, despite a moderation in mortgage rates.
The Commerce Department said on Thursday new home sales declined 6.9 per cent to a seasonally adjusted annual rate of 607,000 units. December's sales pace was revised higher to 652,000 units from the previously reported 621,000 units.
Economists polled by Reuters had forecast new home sales, which account for about 11 per cent of housing market sales, slipping 0.6 per cent to a pace of 620,000 units in January.
New home sales are drawn from permits and tend to be volatile on a month-to-month basis. They fell 4.1 per cent from a year ago. Affordability remains a challenge, especially at the lower end of the market, even as mortgage rates have dropped to last year's highs and house price inflation has slowed.
Expensive lumber as well as land and labor shortages continue to constrain builders.
Economists expect the housing market, which hit a soft patch last year, to remain sluggish through the first half of 2019. Investment in homebuilding contracted 0.2 per cent in 2018, the weakest performance since 2010.
The release of the January new home sales report was delayed by a 35-day partial shutdown of the federal government that ended on Jan 25. February's new home sales report, which was scheduled for release on March 25, will now be published on March 29.