New homes sales took a plunge in January, especially in the West and Midwest. The Midwest I can understand because of the erratic weather, but the West?
(Bloomberg) Purchases of new homes dropped more than forecast in January as contract signings slumped in the western U.S. by the most since May 2010.
Sales declined 9.2 percent to a 494,000 annualized pace after a 544,000 rate in December that was the strongest in 10 months, Commerce Department data showed Wednesday. The median forecast of economists surveyed by Bloomberg called for 520,000. Sales in the West fell 32.1 percent.
Here is the breakdown.
And here is the chart. The housing bubble and the decline in real median household income really put the kabash on new home sales.
On the mortgage application side, the unadjusted Purchase Index decreased 4 percent compared with the previous week and was 27 percent higher than the same week one year ago.
Of course, the decreasing credit standards for mortgage loans is helping expand mortgage purchase applications.
I personally feel comfortable with the Federal Housing Finance Agency in charge of regulating Fannie Mae and Freddie Mac.