New Home Sales Fall Back
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- Kara Johnson | November 26, 2010
New home sales unexpectedly fell in October, dropping back toward the record lows posted last summer, according to monthly figures released by the Census Bureau.
Sales of new single-family homes fell to a seasonally adjusted annual rate of 283,000 for the month, an 8.1 percent decline from September’s level of 308,000. Most analysts had expected a slight increase for the month.
The figures suggest that September’s uptick, which followed a record low in August, may have been a statistical anomaly. New home sales rates have ranged between 275,000 to 283,000 in four of the past six months, with August being the lowest annual sales rate ever reported by the Census Bureau in half a century of recordkeeping.
Census Bureau housing surveys are subject to large sampling errors and the bureau cautions that several months of data are needed to establish a trend. The October monthly decline, for example, is only about half of the survey’s margin of error.
On an annual basis, October’s sales rate is down 28.5 percent from October 2009, when sales reached a rate of 396,000 on the strength of the homebuyer tax credit.
The median sales prices for all home sold fell sharply in October, to $194,900, down from $226,300 the month before. It was the lowest median sales price reported since December 2003 and the first time since the downturn began that the national median sales price has been below $205,000.
The monthly drop in both sales and prices was driven in large part by a decline in sales in the $200,000-$300,000 range, which fell by nearly one-third, while sales of new homes below $200,000 posted moderate increases in real terms. Twenty-three percent of all new homes sold during the month went for less than $150,000, the largest share in at least a year.
The supply of new homes for sale fell slightly, to 201,000 down from 204,000 in August, but the lower sales rate meant the predicted months of supply rose to 8.6 months, up from 8.0 months in October.
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