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Bloomberg NewsMarch 26 (Bloomberg) -- Sales of new homes in the U.S. fell to the lowest level in 13 years as tighter loan restrictions and the prospect of even lower prices kept buyers away.
Sales dropped 1.8 percent in line with forecasts to an annual pace of 590,000, the least since February 1995, the Commerce Department said today in Washington. January purchases were revised higher. The median price decreased 2.7 percent from a year earlier.
The decline in sales, now in its third year, has caused builders to slash construction and is hurting other parts of the economy as consumers and businesses have a harder time getting credit. A separate report showed orders to factories for durable goods unexpectedly dropped in February, led by the biggest decline ever in demand for machinery.
``The direction is still down,'' Anirvan Banerji, director of research at the Economic Cycle Research Institute in New York, said in an interview with Bloomberg Television. ``We are now in a recession. We are unfortunately past the tipping point, and that means we have further to go in terms of housing downside''
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