New home sales fell 9 percent in January, pushing sales activity to its slowest pace since the end of the last recession, the government said yesterday as the housing industry continued to stagger following the October stock market collapse.
A downturn in housing has often been the harbinger of the onset of a recession, but analysts said they believed falling mortgage rates offered the hope of a rebound in home sales in coming months.
In January, the Commerce Department said that sales of new single-family homes fell for the third consecutive month, dropping to a seasonally adjusted annual rate of 535,000 units, 26 percent below a year ago and the slowest pace since the last recession was ending in December 1982.
In a second lackluster economic report, the Commerce Department said orders for manufactured goods fell 0.6 percent in January to a seasonally adjusted $212.6 billion.
While this was the first decline in five months, analysts noted that it followed an unusually large 2 percent December increase, a gain that reflected a big jump in demand for jet aircraft.
Analysts said the one-month setback did nothing to change their view that American manufacturers are continuing to enjoy a sales boom led by increased demand for exports.
Analysts also said they were surprised by the sharpness of the decline in home sales, especially since sales had already fallen 6.8 percent in December and 3.4 percent in November.
The decline in new home sales followed other reports showing a big decline in construction starts for new homes in January and the third consecutive monthly decrease in sales of existing homes.
"It looks like housing is bearing the brunt of the stock market decline, but I believe lower interest rates can solve a lot of problems in this industry," said Bob Villanueva, director of economic forecasting for the National Association of Home Builders.