New single-family home sales in the United States came in weaker-than-expected in October, injecting a bit of reality into the housing industry.
On Wednesday, the Commerce Department reported that purchases on new homes, measured by contracts signed, declined 0.3 percent to a seasonally adjusted 368,000-unit annual pace last month. Economists polled by Reuters had predicted a 390,000-unit rate. Purchases increased in two of four regions last month, with the Midwest leading the way. America’s breadbasket cooked up a 62.2 percent surge in purchases, reaching its best level in nearly three years. Sales in the West jumped 8.8 percent to the fastest pace since July 2008, according to Bloomberg.
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Like most government data, revisions are often needed. The September new sales figure, which was originally reported at 389,000, its highest level in more than two years, was revised lower to 369,000. Thus, the month-over-month number represents only a 1,000-unit decrease. The Commerce Department also noted that superstorm Sandy most likely had a “minimal” impact on October sales.
“While housing has bottomed and it’s clearly moving in the right direction, we just don’t know how much momentum it’s going to be able to gather in an environment where the labor backdrop, whether defined by job growth or wages, is itself not gathering much momentum,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets, according to Bloomberg.
A longer-term view of new one family houses sold:
In a separate report…