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New Home Sales Edge Upward in October

by Chicago Agent

New home sales posted modest monthly gains in October, though buyer skepticism remains.

New-home sales rose slightly in October by 1.3 percent to a seasonally adjusted annual rate of 307,000, according to new data from the Commerce Department released this morning.

The data, which represented a 4,000-unit increase from September, beat economists’ expectations. In a Dow Jones Newswire survey cited by The Wall Street Journal, economists had predicted sales to decrease by 0.3 percent.

Year-over-year data, as has been the pattern for most housing data this year, was much stronger, with October 2011’s sales almost 9 percent above last year’s October. Regional data was similarly promising, with the Midwest’s sales up 22.2 percent.

Even with the monthly increase, the Journal pointed out that demand for new-housing remains weak, mainly because of high unemployment and economic uncertainty. Along with creating hesitation in buyers, who fear further price reductions on such a costly investment, owners are similarly skittish in dealing with unstable prices and a housing inventory increasingly weighed down by distressed properties.

“For the housing sector to recover, the economy needs to create more jobs and housing prices must stabilize,” wrote Jeff Bater and Eric Morath for the Journal. “But economists think prices will keep falling because the foreclosure pipeline is long.”

For details graphs and charts illustrating the latest data, consult this post from Calculated Risk.

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