We just got a look at how the new home market fared in October. Here’s a recap:
* New home sales spiked 6.2% to a seasonally adjusted annual rate of 430,000. That was up from 405,000 a month earlier and above forecasts for a reading of 404,000. The readings for the past few months were also revised higher by a net 7,000 units.
* Regionally it was a mixed bag. Sales fell 5.1% in both the Northeast and the West. They plunged 20% in the Midwest, but soared 23.2% in the South.
* The raw number of homes for sale continues to decline. It dropped to 239,000 from 250,000 in September. You have to go all the way back to May 1971 to find a lower level of new home inventory. The months supply at current sales pace indicator of inventory fell to 6.7 from 7.4. That’s the lowest since December 2006. Meanwhile, the median price of a new home dipped 0.5% from a year earlier to $212,200.
The evidence continues to show stabilization in the housing market. Not a huge new bull market, mind you. But an end to the relentless flood of bad news we saw in 2006, 2007, 2008, and 2009.
In October specifically, sales rose by a greater-than-expected 6.2%. Home prices dropped by the smallest margin in almost a year. And the supply of new homes continued to plunge. New home inventory is now plumbing depths we haven’t seen in 38 years. If you’re looking for a sign that builders will need to start swinging their hammers again soon, this is it.
Elevated unemployment, tighter credit standards, and an ongoing influx of foreclosed, existing homes will ensure the recovery remains anemic. But it will be a recovery nonetheless.
{ 2 comments… read them below or add one }
I agree that elevated unemployment will weigh down any robust recovery (unless we go back to unscrupulous lending standards), but the media and government are hard at work manipulating the unemployment numbers as well. The news today is that continuing claims decreased. I read an article earlier this month that continuing claims don’t include those on extended benefits. How can you not count those on extended unemployment among the unemployed. What????? Economists say that continuing claims measure how long it takes someone to find comparable work. Who is getting comparable work? Even those not collecting extended benefits have taken jobs at half the salary they were once making. Now with the good new rolling in by the second (thanks to the Ministry of Truth), let’s all go out and make the retailers look good this holiday season. It never ends. I’m moving to an island somewhere.
“See No Asset Bubbles … Hear No Asset Bubbles … Speak No Warnings About Asset Bubbles”
Mike exactly. Why can’t you see this applies to houses too? It’s all artificial demand hidden by fake numbers. I just do not understand why you think you called a bottom in housing.
If you have stats to show the much talked about home sales figures are real buyers, who can afford to make real payments for 30 years, then I would believe it.
As you know, I think the numbers are bogus put out by the realtors and the Fed to get people to buy homes. Realtors fake the numbers, the Fed is giving away homes again. –MichaelM