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/ 86.45.131.* / 2009-11-25 16:22
Highlights
New home sales join existing home sales to show major gains in October, results tied to the expiration of first-time buyer credits, credits which have since been extended and expanded. New home sales jumped 6.2 percent in October to a much higher-than-expected annual rate of 430,000. Supply is very low, the result of improving sales but also reflecting the heavy cutback in housing starts. Only 239,000 new homes were on the market in October in what is the lowest number going all the way back to 1971. Supply at the current sales rate fell to 6.7 months vs. September's 7.4 months and compared with 11.1 months a year ago.
Thin supply is helping prices with the median price up 0.7 percent in the month to $212,200 for a year-on-year rate that is barely negative, at minus 0.5 percent. In contrast, the average price fell 8.3 percent to $261,100 pointing to firmer prices at the lower end of the market, the area where sales activity appears to be concentrated.
October's pace in the housing sector was skewed by stimulus effects and is not likely to be repeated in November though new stimulus efforts are likely to limit any dip. October's strength is definitely impressive and hints at underlying resilience in the economy. Stocks and commodities moved higher in reaction to today's report