New-home sales edge down in October

The preliminary sales pace dipped 3.2 percent for the month to a seasonally adjusted annual rate of 1.004 million units, equivalent to the average pace for the third quarter of the year.

“The new-home sales report by the government is in line with what builders have been reporting from the field for several months – that the market correction in terms of sales is largely behind us and the market is stabilizing,” said National Association of Home Builders President David Pressly in a news release. “Our surveys show that nearly half of the builders are now trimming prices, and most are offering nonprice sales incentives. These efforts have helped.”

NAHB Chief Economist David Seiders said aggressive sales efforts and low mortgage interest rates have buoyed housing affordability in recent months.

“Surveys of consumer sentiment show that home buying conditions improved markedly in both October and November,” Seiders said.

Home inventory

The inventory of new homes for sale fell for the third consecutive month in October to 558,000 units, equivalent to a seven-month supply at the current sales pace.

Completed homes for sale were nearly 30 percent of the inventory, while units still under construction represented 54 percent of the inventory. New homes that will be for sale but have only been permitted so far represented more than 16 percent of the inventory level.

While completed units have accounted for a rising share of total homes for sale, the median length of time that completed homes were on the market was only 3.8 months in October, down from four months a year earlier.[[In-content Ad]]