New Home Sales Plunge to Record Low

New single-family home sales unexpectedly fell in February to hit a record low and prices were the lowest since December 2003, a government report showed on Wednesday, suggesting the housing market slide was deepening.

The Commerce Department said sales dropped 16.9 percent to a seasonally adjusted 250,000 unit annual rate, the lowest since records began in 1963, after an upwardly revised 301,000-unit pace in January. Sales plunged to all-time lows in three of the four regions last month.

Economists polled by Reuters had forecast new home sales edging up to a 290,000-unit pace last month from a previously reported 284,000 unit rate.

Compared to February last year sales were down 28 percent.

An oversupply of homes exacerbated by an increasing flood of properties falling into foreclosure is frustrating recovery in the housing market. Data on Monday showed a steep drop in sales of previously owned homes in February, with prices tumbling to a near nine-year low.

The median sales price for a new home tumbled 13.9 percent last month to $202,100, the lowest since December 2003. Compared with February last year, the median price fell 8.9 percent. Persistent price declines could dampen hopes of a pick-up in sales during spring.

At February's sales pace, the supply of new homes on the market rose to 8.9 months' worth, the highest since August, from 7.4 months' worth in January. There were 186,000 new homes available for sale last month, matching the prior month's inventory.