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New-Home
Sales Jump A
'Surprising'
13 Percent In
October
Article
Date - Nov.30.2005 |
|
Sales
of new single-family
homes jumped
a surprising
13.0 percent
to a record
seasonally adjusted
annual rate
of 1.424 million
units in October,
the U.S. Commerce
Department reported
today. The October
sales pace was
9.0 percent
above a year
ago.
“Home
builders continue
to see healthy
demand for new
homes and expect
sales activity
to continue
at slightly
more moderate
levels in the
months ahead,”
said David Wilson,
president of
the National
Association
of Home Builders
(NAHB) and a
custom home
builder from
Ketchum, Idaho.
“Our monthly
Housing Market
Index surveys
of builders
show that a
majority have
maintained a
positive view
of future sales
but that builder
sentiment has
moved down from
mid-year highs.”
“The great
strength of
new-home sales
in October was
surprising,”
said NAHB Chief
Economist David
Seiders. “The
upshift in interest
rates may have
pushed a lot
of fence sitters
into a buying
mode, and builders
may have deepened
sales incentives
to counter growing
buyer resistance
to home prices
and interest
rates. But it’s
also likely
that today’s
report overstates
the true pace
of home sales
because of well-know
statistical
deficiencies.”
“The Commerce
Department’s
monthly estimates
of home sales
are subject
to a high degree
of sampling
variability
as well as substantial
revision, especially
on a regional
basis,”
Seiders noted.
“Indeed,
the statistical
confidence intervals
around sales
estimates for
the Northeast
and West regions
are particularly
wide, and these
regions drove
the national
sales numbers
sharply upward
in October.
More data will
be required
to assess the
true condition
of the housing
market as we
move ahead.”
Three of four
regions across
the country
posted increased
sales of new
homes in October,
with two regions,
the West and
the Northeast,
experiencing
the most dramatic
rises. Sales
in the West
jumped 46.9
percent and
sales in the
Northeast were
up 43.3 percent
from the month
before. Sales
in the South
increased a
modest 1.9 percent
and sales in
the Midwest
dropped 9.5
percent.
The inventory
of new homes
for sale was
496,000 at the
end of October,
a 4.3 months’
supply at the
current sales
pace. Of that
total, for-sale
units that were
not yet started
represented
20 percent.
Units still
under construction
were 59 percent
of the inventory,
and completed
homes for sale
were 21 percent
of the total
? a smaller
proportion than
a year ago.
“For additional
information
please visit
www.HousingEconomics.com
by NAHB, the
Economics Publication
for America's
Housing Industry.”
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