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Economy in Brief

U.S. New-Home Sales Fell During October; Lowest Since 1991
by Tom Moeller November 26, 2008

The U.S. Census Department reported that October sales of new single-family homes fell 5.3% m/m to 433,000 after a downwardly revised 0.7% September uptick. The level of sales in October was off by nearly 70% from the July 2005 peak and sales fell short of Consensus expectations for 443,000.

The m/m change in sales was quite mixed by region. Sales in the West dropped 18.0% and sales in the South were off 6.0%. These declines were countered by gains elsewhere in the country. New home sales in the Midwest sales recovered half of their September decline with a 6.0% gain and new home sales in the Northeast rose 22.6% to their highest level since June.

The median price for a new single-family home declined 1.7% to $218,000. The drop came after a 0.4% September gain that was better than the initial report of a m/m decline. Prices were off 7.0% y/y and new home prices in September were back to where they were late in 2004. The decline in home prices matched the 7.0% drop for September reported yesterday by the Office of Federal Housing Enterprise Oversight (FHFA). The FHFA figures, (formerly the Office of Federal Housing Enterprise Oversight (OFHEO), as well as the Census Dept. figures, are available in Haver's USECON database.

The number of new homes for purchase again fell again fell sharply, by 8.0% (-25.7% y/y). That reduced the inventory of unsold homes to the lowest level since mid-2004. In each of the country's regions, the inventory is down roughly one-quarter during the last year.

The month's supply of new homes for sale ticked higher m/m to 11.1 and that roughly has been the level since earlier this year.

US New Homes October September Y/Y (%) 2007 2006 2005
Total Sales (SAAR, 000s) 433 457 -40.1 768 1,049 1,279
  Northeast 38 31  -41.5 64 64 81
  Midwest 71 67 -44.5 118 161 203
  South 233 248 -38.5 408 559 638
  West 91 111 -39.7 178 266 356
Median Price (NSA, $) 218,000 221,700 -7.0 243,742 243,067 234,208
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