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New Home Sales Dropped 12.6 Percent In January



Gah.
Sales of new homes fell significantly in January, a dismal sign after the worst year for that sector in nearly a half-century.

New-home sales dropped to a seasonally adjusted rate of 284,000 homes last month, the Commerce Department said Thursday. That's down from 325,000 in December and less than half the 600,000-a-year pace that economists view as healthy.

Bad winter weather likely hampered some sales, although the industry has been struggling since the housing bubble burst in 2006.

Last year was the fifth consecutive year that new-home sales have declined after hitting record highs during the housing boom. Buyers purchased 322,000 new homes last year, the fewest annual total on records going back 47 years. Economists say it could take years before sales return to a healthy pace.

Builders of new homes are struggling to compete in markets saturated with foreclosures. High unemployment and uncertainty over home prices have kept many potential buyers from making purchases.
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Photo: Molly Riley/Reuters