By Ruth Mantell
The rise in U.S. new-home sales to a seasonally adjusted annual rate of 430,000 was well above the 390,000 pace that economists surveyed by MarketWatch had expected.
Sales rose 23.2% in the South. By contrast, monthly sales fell by 20% in the Midwest, and by 5.1% in both the Northeast and the West.
“On the surface, one would have assumed that the surge in sales activity was induced by the rush of first-time home buyers trying to get ahead of the originally scheduled end of the first-time homebuyers’ tax credit at the end of October,” wrote Millan Mulraine, economics strategist with TD Securities, in a research note. “However, given the lopsided regional dimension to the increase in home sales, we are not entirely convinced that this was the only story.”
The government cautions that its housing data are subject to large sampling and other statistical errors, with large revisions common. It can take up to six months for a trend in sales to emerge.
The pace of new-home sales in September also was revised slightly higher, to a level of 405,000. New-home sales are up 5.1% compared with a year ago, the government’s data showed.
The supply of homes on the market fell to 239,000 in October, representing a 6.7-month supply.
The median sales price in October hit $212,200, compared with $213,200 in the prior year.
(c) 2009, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.
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