Sales of new homes in the United States plunged by 10.5 percent in February, the largest drop in nearly nine years, the Commerce Department reported on Friday.

The report said that sales of new single-family homes declined to a seasonally adjusted annual rate of 1.08 million homes last month. The 10.5 percent drop in new home sales in February followed a 5.3 percent decline in January and was the biggest drop since a similar 10.5 percent fall in April 1997.

By U.S. regions, sales of new homes declined by 29.4 percent in the West, the largest amount in all regions. Sales were also down in the South, dropping 6.4 percent. However, sales in the Northeast increased by 12.7 percent while sales in the Midwest were up by 5.2 percent.

The report also showed that the median price of a new home, mid- point where half the homes sold for more and half for less, dropped by 1.6 percent from January to 230,400 in last month and off 2.9 percent from February 2005.

Analysts said that the decline is another sign that the U.S. housing market, after setting sales records for five straight years, is slowing under the impact of rising mortgage rates.

Source: Xinhua