Sales of new homes plummeted 14 percent in February to the lowest level in nearly three years, despite the cheapest mortgage rates in five months, the government reported Wednesday.
Sales were off in every region, including a huge 28.5 percent plunge in the West. They were down 10.7 in the South, 8.8 percent in the Midwest and 1.6 percent in the Northeast.
The Commerce Department said sales of new single-family homes nationally totaled 551,000 at a seasonally adjusted annual rate, the smallest number since a 546,000 rate in April 1992.
The decline was the steepest since a 22 percent drop in January 1994 when unusually severe winter weather covered most of the nation.
Sales had risen a revised 2.6 percent in January, weaker than the 3.8 percent advance in the initial estimate. Analysts said the gain was an aberration.
The report also showed that sales were much softer in December than first thought. The government revised that month's initial 0.9 percent increase to a 2.6 percent drop.
Construction of new homes and sales of previously owned homes also fell in February. Some analysts said a cooling economy was offsetting the effects of lower mortgage rates.
The median price of a new home was $129,900, up from $127,900 in January but unchanged from February 1994.
Sales fell to 63,000 in the Northeast, down from 64,000 in January.
A seasonally adjusted estimate of 350,000 new houses were for sale at the end of February, the biggest inventory in five years.