NEW YORK (Dow Jones) – Shares of home builders fell Wednesday following a record low in January new-home sales, even with an early boost from a narrower-than-expected loss from Toll Brothers Inc. (TOL).

Home builder stocks gained early Wednesday ahead of the data. Following the news that U.S. new-home sales unexpectedly plunged in January, the Dow Jones U.S. Home Construction Index immediately dropped about 1%. It recently slid 2.8% as declines in the sector accelerated.

Demand for single-family homes fell 11.2% from the previous month to a seasonally adjusted annual rate of 309,000, the U.S. Commerce Department said Wednesday.

Economists surveyed by Dow Jones Newswires had estimated sales would rise 3.8%, to 355,000.

In recent trading, shares of D.R. Horton Inc. (DHI) slid 3.7% to $12.11, while Pulte Homes Inc. (PHM) fell 4.1% to $10.52. M/I Homes Inc. (MHO) stock declined 3% to $13, and Lennar Corp. (LEN) lost 5.8% to $15.34. Ryland Group Inc. (RYL) shares dropped 3.1% to $22.52, and KB Home (KBH) slipped 4% to $15.57.

Even Toll Brothers shares declined, down 2.2% to $18.46, despite reporting its fiscal first-quarter loss narrowed to 25 cents a share from 55 cents a share a year earlier because fewer write-downs helped the luxury home-builder’s bottom line. Analysts surveyed by Thomson Reuters had been expecting a loss of 35 cents.

“We believe the housing market is still in choppy waters but the seas are getting calmer,” Chief Executive Robert Toll said in a statement.

The news from Toll Brothers initially lifted builder stocks but did little to overshadow the weak new home sales data.

The 11.2% decrease in January carried sales to their lowest since records began in 1963. Sales fell below the level of 329,000 in January 2009 that analysts had considered the bottom for the market. Over the past year, sales had climbed, albeit slowly and unevenly, because of low prices, low mortgage rates, and tax incentives. But Wednesday’s report wiped out the advance and showed, year over year, sales were 6.1% down from January 2009.

Building-related companies also declined, including shares of Quanex Building Products Corp. (NX), a maker of windows and aluminum sheet products, down 4.5% to $15.49, and Simpson Manufacturing Co. (SSD), down 1.7% to $23.89. The company makes construction materials including devices for connecting wood to wood as well as venting systems for gas and wood-burning appliances.

Shares of Building-products makers Masco Corp. (MAS) fell 1.8% ti $13 and USG Corp. (USG) fell nearly 1% to $12.97.

-By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com

(Jeff Bater and Darrell A. Hughes contributed to this report.)

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