New home sales plummeted 11.2 percent last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level since the government began keeping records in 1963.

That's a decline 6.1 percent from January 2009.

The big drop was a surprise to many industry analysts who had expected sales would rise about 5 percent over December's pace.

The drop in new home sales is evident in all U.S. regions but in the Midwest, where sales was up 2.1 percent. Sales were down 35 percent in the Northeast, 12 percent in the West and almost 10 percent in the South.

New home sales for all of 2009 dropped by almost 23 percent to 374,000, the worst year on record. The National Association of Home Builders estimates that sales will increase to more than 500,000 sales this year.

At the current sales pace, the inventory of homes for sale would take 9.1 months to sell through up from December’s inventory of 8.1 months. Prior to December, inventory levels had been on the decline since May 2009.