New House Sales at Slowest Pace Since ’82

WASHINGTON — Led by weakness in the fragile Northeast, sales of new homes fell to their lowest level in September since the recession eight years ago, the Commerce Department said Tuesday.

Single-family home sales plunged 6% last month after declines of 1.8% in August and 0.9% in July, the department said.

The latest drop pushed home sales to a seasonally adjusted annual rate of 503,000 units in September, the slowest pace since the 480,000-unit rate in recession-era October, 1982, it said.

With the economy widely expected to lose steam and possibly slip into a recession, economists predict that things will get worse for the home-building industry before they get better.

Depressed by high interest rates, slowing job growth and waning consumer confidence, the home-building industry has been in a slump for more than a year. Also slowing home sales has been a growing number of “move-up” buyers who are slower to strike a deal than first-time buyers, economists said.

So far this year, the actual number of new homes sold has fallen 15% to 435,000. In September, the sales total before seasonal adjustment fell to 38,000 units from 47,000.

The slump has been particularly severe in the Northeast, where sales fell 15.6% in September to an annual rate of 54,000 units.

In the South, sales fell 7.9% to a rate of 223,000, while in the Midwest, they were down 2.2% to a 91,000-unit annual rate. Sales in the West slipped 0.7% from August to a rate of 136,000 units.

Home Sales Seasonally adjusted annual rate, thousands of units Sept., ‘90: 503 Aug., ‘90: 535 Sept., ‘89: 638 Source: Commerce Department Home Sales, Associated Press/ Los Angeles Times