New home sales rise 1.3% in October
While encouraging, sales activity still below normal, builders group says
Sales of newly built, single-family homes inched up 1.3% to a seasonally adjusted annual rate of 307,000 units in October, according to newly released data from the U.S. Commerce Department.
The gain is from a downwardly revised rate in the previous month, and marks the best pace of new-home sales activity since last May.
"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," said Bob Nielsen, chairman of the National Association of Home Builders and a home builder from Reno, Nev.
"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," Nielsen added.
NAHB Chief Economist David Crowe agreed.
"Today's report is right in line with our forecast for modest and gradual improvement in sales activity through the remainder of the year," Crowe said. "Particularly encouraging is the fact that builders continue to hold down their inventories to match the current sales rate, with the number of new homes for sale now down to a sustainable, 6.3-month supply."
Regionally, new-home sales held unchanged in the Northeast and gained 22.2% in the Midwest and 14.9% in the West in October. The South was the only region to post a decline, of 9.5%.
Meanwhile, the nationwide inventory of new homes for sale held at an all-time record low of just 162,000 units in October, which is a 6.3-month supply at the current sales pace.