P.M. BRIEFING : Sales of New Homes Plunge 9.4%

From Times wire services

Sales of new, single-family homes plunged 9.4% in February to the lowest level in more than a year, the government reported today.

The Commerce Department said the sales retreat followed a 2.5% increase in January and a 3.7% gain in December. It was the biggest decline since a 9.5% drop last November and left sales at the lowest rate since January, 1988.

Analysts expect home sales and construction to decline this year due to the Federal Reserve Board’s campaign to push up interest rates in order to restrain inflationary pressures in the economy. Fixed-rate home mortgages last week were averaging 11.22%, up from 9.99% a year earlier.