New-Home Sales Climbed in October

The Wall Street Journal

New-home sales unexpectedly climbed in October despite bad weather and uncertainty over a big tax credit for first-time buyers.

Sales of single-family homes increased 6.2% to a seasonally adjusted annual rate of 430,000, the Commerce Department said Wednesday.

Economists surveyed by Dow Jones Newswires estimated a 1.0% drop to a 398,000 annual rate.

The median price for a new home fell in October, but not by much, dropping 0.5% to $212,200.

Some analysts thought the looming expiration of an $8,000 tax credit for home buyers would scare off buyers in October. New-home sales, unlike sales of existing homes, are recorded with the signing of a sales contract and not the closing. There was also unseasonable cool and wetness in parts of the U.S. last month.

The tax credit has since been extended by Congress through April, a move made earlier this month that is seen helping the housing market.

Wednesday’s report said sales in September fell 2.4% to 405,000. Year over year, sales were up 5.1% since October 2008.

Inventories shrank some more. There were an estimated 239,000 homes for sale at the end of October. That represented a 6.7 months’ supply at the current sales rate. An estimated 250,000 homes were for sale at the end of September, a 7.4 months’ inventory.

Commerce’s report Wednesday showed October new-home sales fell in most regions but were up in the South.