New Home Sales Plummet 11.2%, Erase All '09 Gains

New home sales took a stunning plunge in January, dropping 11.2% to a new record low, wiping out all the gains the housing market had made over the past year. The figure blindsided analysts, who had expected a 3.8% increase, according to a Wall Street Journal poll. The plunge came despite a 2.4% drop in the median price.

“The foreclosure flow is robbing demand from the new-homes market,” one analyst tells Bloomberg. “The new-homes market just can’t get off the floor. If new homes suffer, construction suffers and jobs suffer.” January marked the third straight month sales have fallen, after rising steadily for most of last year. The drop was big enough to render those gains moot; January sales were down 6.1% year-over-year.