New Homes Sales up Slightly, Inventory Down

New homes sales in October rose to a seasonally adjusted annual rate of 307,000 according to data released today by the Census Bureau and the Department of Housing and Urban Development.  This is a 1.3 percent increase from the downwardly revised estimate for September sales of 303,000 and 8.9 percent above the 282,000 pace of new home sales in October 2010.  An estimated 25,000 new homes sold during the month.

Sales surged in the Midwest, up 22.2 percent month-over-month and 37.5 percent from one year earlier.  The annual rate in the Midwest in October was 55,000.  The West also performed well with a 14.9 percent increase over the September rate and 54.0 percent improvement since October 2010.  Sales during the period were at a 77,000 annual rate.  The rate of sales was unchanged from September in the Northeast at 22,000, a figure that was 26.7 percent below that of one year earlier while the South's rate of 153,000 was down 9.5 percent month-over-month and 5.6 percent year over year. 

There were 162,000 homes for sale at the end of the October, identical to the number available at the end of September, an inventory of 6.3 months at the current pace of sales.   An estimated 200,000 new homes were for sale one year earlier, an 8.5 months supply.  Of the 162,000 available homes, construction has not yet begun on 28,000, 74,000 are under construction, and 60,000 are completed.  Homes that sold during October were on the market a median of 7.4 month compared to 8.0 months in September and 8.1 months in October 2010.

The median sales price of new homes in October was $212,300 and the average was $242,300.  In October 2010 the median price was $204,200 and the average was $254,400.

In a statement this morning the National Association of Home Builders (NAHB) called the October report "the best pace of new-home sales activity since this May."  Bob Nielsen, NAHB chairman said, "Builders have been seeing some marginal improvement in sales activity over the past few months, particularly in select markets where consumer confidence is higher due to improved economic conditions. While this trend is encouraging, overall sales activity is still well below normal due to the effects of overly tight credit conditions for builders and buyers, the continued flow of distressed properties on the market, and inaccurate appraisal values on new homes."

New Home Sales Data