Slight Improvement in New Home Sales

New home sales increased 1.3% in October to a seasonally-adjusted annual rate of 307,000, although the increase was off of a downwardly revised September level of 303,000 from the originally reported 313,000. Only one region, the South, showed a loss, down 9.5% to a SAAR of 153,000, and the lowest in over a year. Even with the slow sales pace, the month’s supply of new homes for sale dropped to 6.3, which is considered a sustainable level. The absolute inventory remains at a record low of 162,000 and completed homes also recorded an historic low of 60,000 homes for sale and ready to occupy.
The slight improvement in sales reflects some consistent improvements in several other housing reports in the last month. Beginning with the NAHB/Wells Fargo Housing Market Index two month improvement by 6 points, there was also improvement in single-family housing starts and permits and a 1.6% improvement in existing single-family home sales in October. While all absolute levels of housing activity remain well below normal, the combined reports do show promise for continued albeit slow improvement as the overall economy shows similar modest advances.
Median new home sales prices increased 4% from October 2010, which is more likely an indication of the composition of homes sold rather than actual price increases for similar homes. NAHB surveys indicate some rise in repeat buyer activity, which would show up as larger more expensive homes being sold rather than a general rise in house prices.



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  1. New Home Sales in October: 307,000 SAAR | Wood on Fire – Topics of Lumber Industry
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