New US home sales plunged in January following back-to-back increases, Wednesday’s sole notable US macro release showed.

The drop, more than 10%, was triple the expected decline, although an upward revision to the prior month’s readout magnified the slippage.

At just 657,000, the annual pace was the slowest since October and the second-weakest since February of last year.

As the figure shows, the percentage decline was the most pronounced since November of 2022, if you exclude October’s hurricane-related plunge.

I’m sure economists will blame the weather in part for January’s lackluster showing, as if it’s not always cold in January, and as if economists somehow aren’t allowed to watch the Weather Channel when they crunch numbers for their forecasts. Consensus was 680,000 for Wednesday’s headline print. So, the actual tally missed by a mile.

This series is (far) too volatile to trust, but the poor showing comes amid a string of similarly lackluster releases covering everything from services sector activity to consumer confidence. In that regard, it’s another paper cut, and you can die of those in very large doses.

Late last week, the NAR said existing home sales fell in January by the most since 2022, and mortgage applications slipped in Wednesday’s update from the MBA. Note that the slowdown in refis and purchase apps comes even as rates continue to recede, albeit not by a lot.

As the figure shows, the average 30-year fixed was 6.88% over the last week, down a fourth week and the lowest since December, but it’s not enough. Not at a time when prices are loitering near record highs.

Hope floats in the inventory bull case, but proponents don’t sound as sure as they once did. “Increasing for-sale inventory in some markets has provided prospective buyers more options as we approach the spring homebuying season,” MBA VP Joe Kan said Wednesday.

Certainly, there’s no shortage of new inventory. Indeed builders are sitting on a veritable glut, but as I’ve suggested repeatedly in recent months, anyone who could afford to buy with prices at records and rates at or near 7% already has, leaving a pool of financially-constrained homeowner hopefuls who need significant incentives to take the plunge.

At this point, prices don’t appear to be responding to elevated supply which, on the new construction side, was the highest last month since December of 2007. The median price was $446,300, a record for any January and the second-highest ever.