The Housing Chronicles Blog: New home sales rise on price decline

Monday, October 27, 2008

New home sales rise on price decline

Despite the wide prognostications by economists on further sales declines of new homes, the Commerce Dept. showed an increase in sales activity during September 2008 as prices continued to fall back to 2004 levels. Still, because the sample size for this particular report is fairly small -- and audits less than 5% of permit reporting places throughout the U.S. -- we could see revisions to the data next month. From a New York Times story:

Sales of new homes recorded an unexpected increase in September as median home prices dropped to the lowest level in four years.

The Commerce Department reported Monday that sales of new single-family homes rose 2.7 percent last month to a seasonally adjusted annual rate of 464,000 homes. Economists had expected sales would drop from the August level.

The median price of a new home sold in September declined 9.1 percent from a year ago to $218,400, the lowest price level since September 2004, a period when home prices were rising rapidly as the country experienced a five-year housing boom.

The surprising increase in September sales still left them 33.1 percent below the level of a year ago as the country is battered by the worst housing slump in decades.

Click here for full story.

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