A report released by the Commerce Department on Tuesday showed a nosedive by U.S. new home sales in the month of February.
The Commerce Department said new home sales plummeted by 18.2 percent to an annual rate of 775,000 in February after jumping by 3.2 percent to an upwardly revised rate of 948,000 in January.
Economists had expected new home sales to tumble by 5.2 percent to a rate of 875,000 from the 923,000 originally reported for the previous month.
With the much bigger than expected decrease, new home sales plunged to their lowest rate since hitting 698,000 last May.
The steep drop in new home sales reflected sharp declines in all four regions of the country, with new home sales in the Midwest leading the way lower with a 37.5 percent nosedive.
New home sales in the West and South also plummeted by 16.4 percent and 14.7 percent, respectively, while new home sales in the Northeast slumped by 11.6 percent.
The report also showed the median sales price of new houses sold in February was $349,400, down 1.1 percent from $353,200 In January but up 5.3 percent from $331,800 in the same month a year ago.
The estimate of new houses for sale at the end of the month was 312,000, representing 4.8 months of supply at the current sales rate.
“We look for new home sales to moderate over the course of 2021 as high prices crimp affordability, but still look for sales to be up about 4% for the year,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.
On Monday, the National Association of Realtors released a report showing existing home sales also tumbled by much more than expected in the month of February.
NAR said existing home sales plunged by 6.6 percent to an annual rate of 6.22 million in February after inching up by 0.2 percent to a downwardly revised rate of 6.66 million in January.
Economists had expected existing home sales to slump by 3.0 percent to a rate of 6.49 million from the 6.69 million originally reported for the previous month.