New-Home Sales in U.S. Plunge 16.6%, Most Since 1994 (Courtney Schlisserman)

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New-home sales in the United States fell last month by the most in 13 years, pointing to more weakness in the real-estate market that limited economic growth last year.

By Courtney Schlisserman

Feb. 28 (Bloomberg) -- New-home sales in the United States fell last month by the most in 13 years, pointing to more weakness in the real-estate market that limited economic growth last year.

The 16.6 percent decrease to an annual rate of 937,000 in January, a pace that was less than any economist had forecast in a Bloomberg News survey, followed 1.123 million in December, Commerce Department figures showed today. The pace of sales was the slowest since February 2003. A measure of housing inventory rose to the highest in three months.

The figures suggest residential construction will remain a drag on the economy and that lower home prices may be needed to stir buyer interest. The decrease in January was exaggerated in part by the return of colder weather after warmer temperatures in the prior month.

``Some of this is weather-related, however having said that, this housing recession is going to go on at least for another six months or so,'' said Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts.