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Friday Feb 27, 2009

US new home sales slump to new record low

WASHINGTON, Feb 26, 2009 (AFP) - US new home sales dropped 10.2 percent in January from a month earlier to the lowest monthly level on record, the government said Thursday.

The Commerce Department said January sales of new one-family houses fell to a seasonally adjusted annual rate of 309,000, the lowest since data collection began in 1963.

The January figure is 10.2 percent below the revised December rate of 344,000 and 48.2 percent below the year-ago level, the department said.

It was below the economists' consensus estimate of 324,000, but when factoring for the upward revision to the December number, the reported number ends up being roughly in line with expectations, analysts said.

The median sales price of new houses sold in January plunged 13.5 percent from last year to 201,100 dollars, the lowest level since December 2003, the department said.

At the January sales rate, there was a hefty 13.3 months worth of supply of new homes for sale, up from 12.2 months in December. 

"That suggests we will see a continued drop in prices," analysts at said.

On Wednesday, US existing home sales fell 5.3 percent in January as potential buyers waited to see the impact of the government's economic stimulus package adopted recently.

The US housing market collapsed after a mortgage crisis that climaxed last year, triggering financial turmoil across the globe.

US Persident Barack Obama this month unveiled a housing rescue plan aimed at staving the rising flood of foreclosures, making mortgages more affordable and stabilizing the housing market.

Obama is moving to spur a housing recovery to pull the world's largest economy out of a second year of recession.

pp/rl - AFP

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