September Home Sales – New-home sales in October rose 1.3 percent above September, but volume remained woefully below the level that would indicate a turnaround in the market.
Housing economists had predicted a minuscule decline, but a revision of in the month turned it into a small gain in October.
The Census Bureau reported Monday that sales for the month were 8.9 percent above October 2010. Yet the annualized rate – sales factored over 12 months – was just 307,000 units.
In a healthy market – not a booming one – the rate would be 750,000 sales, housing experts say.
With new-home sales stuck at the bottom, IHS Global Insight Inc. economist Patrick Newport said that 2011 “is shaping up to be the worst on record for the single-family housing market.”
“New-home sales, single-family housing starts, and single-family permits will all set record lows in 2011,” Newport said. “Existing-home sales may avoid the cellar, but only because a third of them are selling at ‘distressed’ prices.”
Economist Joel L. Naroff of Naroff Economic Advisers called the level of demand for housing “minuscule.”
Housing has been adding a little to growth this year and that is likely to continue, Naroff said. The operative word, however, is little.
“The huge bump in jobs, income, and GDP that we usually get from a rebounding housing market is not likely to be seen for quite a long time, so don’t expect overall growth to be great over the next year,” Naroff said.
The Census Bureau on Monday also released the state permit estimates for October, with only Alaska and North Dakota not showing historic lows.
Average new-home prices fell in October from September to $243,000 – the lowest since August 2003.
Another record low reached in October was the inventory of new homes for sale – 163,000 or a 6.3-month supply at the current pace.