New Home Sales Up in October

Sales of new one-family houses in October 2009 were at a seasonally adjusted annual rate of 430,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.2 percent (±17.6%)* above the revised September rate of 405,000 and is 5.1 percent (±14.9%)* above the October 2008 estimate of 409,000.

The median sales price of new houses sold in October 2009 was $212,200; the average sales price was $261,100. The seasonally adjusted estimate of new houses for sale at the end of October was 239,000. This represents a supply of 6.7 months at the current sales rate.

This seems like good news but I’m not sure. Sales were down in all regions except the South, where sales surged 23% from September to October. That’s a big jump for one month and makes me suspicious. Why would sales jump that much in one month? Weather? Really? I don’t know if I’m buying that explanation. If the data is good though, this just continues the trend that has been in place for the last nine months or so. Sales are now rising year over year, inventory is dropping (and is now basically normal) and prices are steadying. If this continues, building will pick up next year.