Weak demand for new homes has kept prices low and forced builders to delay… (Paul Sakuma, Associated…)
Reporting from Washington — Sales of new single-family homes were barely changed in October and there was little evidence of any improvement in the slumping U.S. housing market.
The U.S. government said new-home sales edged up to an annual rate of 307,000 in October, seasonally adjusted. Sales for September were revised down to 303,000 from an original reading of 313,000.
Economists polled by MarketWatch had forecast new-home sales to rise to 320,000 in October. In a healthy market, sales are typically two to three times that level.
Weak demand for new homes has kept prices low and forced builders to delay projects. The median sale price declined $1,000, to $212,300, in October and the supply of homes on the market fell slightly to 6.3 months — the lowest level in 11/2 years.
Many prospective buyers have turned to previously owned homes in search of better deals while the nation's high 9% unemployment rate has limited the pool of potential customers despite ultra-low interest rates.
"The report shows we continue to bounce along the bottom," said Mitchell Hochberg, principal of Madden Real Estate Ventures in New York. He said the housing industry won't recover "until there's strong economic growth and job creation."
New-home sales are 8.9% higher compared with a year earlier, however. In 2010 the housing market posted its worst year of sales since the government began keeping records in the early 1960s.
Half the new homes sold were purchased in the South, but sales in that region fell 9.5% to an annual rate of 153,000 compared with a month earlier.
Sales in the West rose almost 15% to a rate of 77,000, while sales in the Midwest rose 22% to an annual rate of 55,000.
Sales in the Northeast were unchanged at a rate of 22,000.
Data for new-home sales often fluctuate sharply from month to month, and economists look at a longer time frame to gauge market trends. New-home sales averaged an annual rate of 301,000 during the three-month period of August to October, slightly more than in the same period last year.
New-home sales are counted when contracts are signed.
Bartash writes for MarketWatch.com/McClatchy.