U.S. New-Home Sales Unexpectedly Fell to Record Low

Sales of new homes in the U.S. unexpectedly fell in January to the lowest level on record, a sign that an extension of a government tax credit may not be enough to rekindle demand.

The report underscores Federal Reserve Chairman Ben S. Bernanke’s comments today that the economy is in a “nascent” recovery the still requires low interest rates. Homebuilders face competition from foreclosed properties that have driven down prices at the same time companies are reluctant to create jobs.

“The foreclosure flow is robbing demand from the new-homes market and that process seems to be strengthening,” said Julia Coronado, a senior economist at BNP Paribas in New York, “The new-homes market just can’t get off the floor. If new homes suffer, construction suffers and jobs suffer.”

Read Full Article from BusinessWeek

- Posted: 2010-02-24 11:10:33

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